Principal Costs in Initial Public Offerings

Dalziel, Thomas; White, Robert E.; Arthurs, Jonathan D.

doi:10.1111/j.1467-6486.2010.01005.x

Cited by 23 publications

(25 citation statements)

References 84 publications

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“…From extant research, we learn that directors with career experience in entrepreneurial finance (i.e. venture capitalists, investment bankers) are heavily involved in supplying capital, monitoring financial performance (Dalziel et al., 2011), and influencing the strategies and entrepreneurial actions of the corporations they direct (Fried et al., 1998). Thus, examining a possible link between directors' career experience in entrepreneurial finance and corporate investments in R&D seems promising.…”

Section: Directors' Human and Relational Capital–randd Expense Relationmentioning

confidence: 99%

An Integrated Agency–Resource Dependence View of the Influence of Directors' Human and Relational Capital on Firms' R&D Spending

Dalziel

Gentry

Bowerman

2011

J Management Studies

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303

283

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In this paper, we contribute to the agency and corporate entrepreneurship literatures by focusing on board antecedents of research and development (R&D). Some researchers in this stream find outside directors negatively influence R&D spending, yet popular opinion suggests boards should be composed of outsiders, and at the same time, firms should be innovative and entrepreneurial. We begin to address this conflict by extending agency theory and incorporating resource dependence views in order to explore the influence of a wider range of director characteristics on R&D spending, a precursor of innovation and entrepreneurial activity. Our empirical results demonstrate that aspects of directors' human and relational capital (e.g. education, entrepreneurial finance experience, technical experience, and interlocks) significantly influence R&D spending. Our findings illustrate that boards can be configured to improve efficiencies, thereby reducing R&D spending, and/or to augment R&D spending. They reveal the merits of considering inside and outside directors separately and show how the independence (i.e. inside/outside status) of directors shapes the effect of their human and relational capital on R&D spending.

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Section: Directors' Human and Relational Capital–randd Expense Relationmentioning

confidence: 99%

An Integrated Agency–Resource Dependence View of the Influence of Directors' Human and Relational Capital on Firms' R&D Spending

Dalziel

Gentry

Bowerman

2011

J Management Studies

Self Cite

303

283

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“…More research on governance, both before and after an IPO venture, is an important consideration for future study. For example, research published in our special issue by Dalziel, White, and Arthurs shows that during the IPO period firm governance is particularly important (Dalziel et al., 2011b). This is a period when owners or principals are particularly powerful and active.…”

Section: Venture Capital and Entrepreneurshipmentioning

confidence: 99%

Revitalizing Entrepreneurship: The Search for New Research Opportunities

Hoskisson

Covin

Volberda

et al. 2011

J Management Studies

139

106

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Entrepreneurship research has traditionally focused on opportunity recognition and resource formation as processes that foster the emergence of new business ventures, through both the lens of the individual entrepreneur and corporate venturing. Although we observe that research is vibrant in these traditional areas, we also argue that the continued revitalization of the field of entrepreneurship can be fostered through examining opportunities for research in areas such as industry change and competition, inter-organizational cooperation (which has proliferated more recently), university-sponsored entrepreneurship, venture finance, institutional differences that foster entrepreneurship (primarily between different countries), and appropriability regime differences (including legal and regulatory frameworks) that foster entrepreneurial activities and profit appropriation. Besides pointing scholars to new promising directions, we argue for more attention to the transformational role of entrepreneurship itself by issuing a call for more multi-level research efforts that connect the micro-and macro-foundations of entrepreneurship and explore the revitalization-related uncertainties such as the cost of creating an entrepreneurial orientation and whether there is an optimal level.

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“…Yet it seems only natural that principals (like agents) may be prone to self-interest and opportunism. This insight is only recently receiving interest as management scholars are beginning to show how principals can also be the cause of governance problems (Dalziel, White, & Arthurs, 2011). For example, contributing to the agency literature, Villalonga and Amit (2006) find powerful shareholders can derive private benefits at the expense of other shareholders.…”

Section: Limitations and Future Directionsmentioning

confidence: 99%

Governing Top Managers: Board Control, Social Categorization, and Their Unintended Influence on Discretionary Behaviors

Knapp

Dalziel

Lewis

2011

Corporate Governance: An International Review

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Manuscript Type: ConceptualResearch Question/Issue: This paper seeks to complement agency and stewardship perspectives regarding the governance of top managers by using insights from social categorization theory. Research Findings/Insights: This paper looks inside the black box of the control-performance relationship. We acknowledge that boards can positively influence organizational functioning by monitoring the top management team. However, we also argue that board control contains a hidden cost. The model we develop describes how control can highlight the distinction between principals and agents thereby causing the top management team to adopt a biased and less cooperative "us vs. them" orientation towards owners and their representatives. We contend this results in an increase in negative discretionary behavior and a decrease in positive discretionary behavior, which dampen the positive influence of control on firm performance. We also describe techniques for mitigating this unintended outcome of control. Theoretical/Academic Implications: Agency and stewardship theories offer alternative views of human nature and provide divergent prescriptions for governance. This paper presents social categorization theory as a complementary lens emphasizing a situational and social view of human nature that helps explain top managers' discretionary behaviors that influence firm performance. Practitioner/Policy Implications: Ongoing governance scandals are costly illustrations of unchecked managerial opportunism. They demonstrate the need for vigilant control. A control approach to governance, however, does not consistently improve firm performance. This paper offers an explanation. It acknowledges that board control is necessary, while arguing that it can have unwanted side effects. We describe two tools (individualization and social recategorization) that can be used to ameliorate these effects.

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Principal Costs in Initial Public Offerings

Cited by 23 publications

References 84 publications

An Integrated Agency–Resource Dependence View of the Influence of Directors' Human and Relational Capital on Firms' R&D Spending

An Integrated Agency–Resource Dependence View of the Influence of Directors' Human and Relational Capital on Firms' R&D Spending

Revitalizing Entrepreneurship: The Search for New Research Opportunities

Governing Top Managers: Board Control, Social Categorization, and Their Unintended Influence on Discretionary Behaviors

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