Abstract:PurposeManagers face the challenge of balancing resources needed to support value creation and value appropriation. In this study the authors analyze the impacts of innovation investments (i.e. value creation: VC) on advertising expenditures (i.e. value appropriation: VA), and vice versa, and verify the effects of these options on short- and long-term performance.Design/methodology/approachThe effects of these two activities on short- and long-term performance were analyzed observing a panel of 4,090 companies… Show more
“…3.2.1.1 Tobin's Q. In line with previous studies (Oliveira et al, 2023;Silveira et al, 2021), we utilized Tobin's Q as a metric to evaluate the post-acquisition performance of acquirers' firms. Tobin's Q is defined as the ratio of a firm's market value to the current replacement cost of its assets (Tobin, 1969).…”
PurposeThe primary aim of this study is to resolve a longstanding debate concerning the impact of takeover premiums on post-acquisition performance. Specifically, we aim to examine how acquirers' marketing capabilities and payment methods moderate the relationship between takeover premiums and post-acquisition performance.Design/methodology/approachThis study employs linear regression to examine the relationship between acquirers' marketing capabilities, payment methods, takeover premiums and post-acquisition performance in the Chinese manufacturing industry. Data for the analysis were collected from both mergers and acquisition (M&A) announcements and the China Stock Market & Accounting Research Database (CSMAR), covering 1,169 acquisitions from 2012 to 2021.FindingsThe results indicate that acquirers' marketing capabilities moderate the impact of takeover premiums on post-acquisition performance. When acquirers possess strong marketing capabilities, takeover premiums increase post-acquisition performance. Conversely, when acquirers lack strong marketing capabilities, takeover premiums are not significantly related to post-acquisition performance. Additionally, it is noteworthy that takeover premiums show a positive correlation with post-acquisition performance, irrespective of the payment methods employed by acquirers for target firms.Originality/valueGiven that takeover premiums are essential for acquiring resources from target firms, it is crucial to maximize the value of these acquired resources. Our findings suggest that acquirers with weaker marketing capabilities before the deal should consider a more conservative approach to pricing target firms.
“…3.2.1.1 Tobin's Q. In line with previous studies (Oliveira et al, 2023;Silveira et al, 2021), we utilized Tobin's Q as a metric to evaluate the post-acquisition performance of acquirers' firms. Tobin's Q is defined as the ratio of a firm's market value to the current replacement cost of its assets (Tobin, 1969).…”
PurposeThe primary aim of this study is to resolve a longstanding debate concerning the impact of takeover premiums on post-acquisition performance. Specifically, we aim to examine how acquirers' marketing capabilities and payment methods moderate the relationship between takeover premiums and post-acquisition performance.Design/methodology/approachThis study employs linear regression to examine the relationship between acquirers' marketing capabilities, payment methods, takeover premiums and post-acquisition performance in the Chinese manufacturing industry. Data for the analysis were collected from both mergers and acquisition (M&A) announcements and the China Stock Market & Accounting Research Database (CSMAR), covering 1,169 acquisitions from 2012 to 2021.FindingsThe results indicate that acquirers' marketing capabilities moderate the impact of takeover premiums on post-acquisition performance. When acquirers possess strong marketing capabilities, takeover premiums increase post-acquisition performance. Conversely, when acquirers lack strong marketing capabilities, takeover premiums are not significantly related to post-acquisition performance. Additionally, it is noteworthy that takeover premiums show a positive correlation with post-acquisition performance, irrespective of the payment methods employed by acquirers for target firms.Originality/valueGiven that takeover premiums are essential for acquiring resources from target firms, it is crucial to maximize the value of these acquired resources. Our findings suggest that acquirers with weaker marketing capabilities before the deal should consider a more conservative approach to pricing target firms.
“…The incorporation of inventories and wages and salaries represents a significant expansion of the resource allocation literature based on resource‐based view. Second, resource allocation's crucial role in granting strategic advantages to companies in developed nations is well documented (Du & Osmonbekov, 2020; Eng & Keh, 2007; Hu et al, 2023; Joshi & Hanssens, 2010; Sardo & Serrasqueiro, 2017; Silveira et al, 2021; Wang & Chen, 2022), but it is less explored in developing economies (Liu et al, 2022; Smriti & Das, 2018; Verma et al, 2022). Limited geographic research hinders our understanding of this relationship.…”
The present study aims to unravel the intricacies of the resource allocation–firm performance relationship by examining the impact of resource allocation to research and development (R&D), advertising, inventories, and wages and salaries on firm performance, considering both short‐term and long‐term dynamics This work is conducted using a sample of 240 listed Indian manufacturing firms over a time span of 18 years, that is, from 2006 to 2023. Based on the empirical findings from the dynamic panel autoregressive distributed lag (ARDL) model, it is revealed that, in the short term, allocating resources to areas such as R&D, advertising, inventories, and wages and salaries has a detrimental effect on sales. However, in the long term, these resource allocations show a positive impact on sales. Regarding stock market performance, both R&D and advertising exert a negative influence on Tobin's Q in the short term, but their impact becomes positive in the long term. In the case of inventories and wages and salaries, their effects evolve over time: Initially, in the short term, both have a positive impact on Tobin's Q, but this effect switches to negative and becomes significant in the long term. The key contribution of this study revolves around a model‐driven approach aimed at tackling the complex issue of resource allocation and its dynamic impact on performance outcomes.
“…Although value creation is the core concept for integrating the resources and capabilities of a collaborative network to achieve competitive advantages (Lepak et al , 2007; Mindruta et al , 2016), the expectation for value appropriation is also critical for suppliers to deploy heterogenous resources to value co-creation in a buyer–supplier relationship (Adegbesan and Higgins, 2011; Ellegaard et al , 2014). A supplier’s competitiveness is established by creating and delivering superior value for customers (Hallberg, 2018; Silverira et al , 2021; Tower et al , 2021). Studies in strategy, marketing and supply chain management develop a series of innovative frameworks for and conduct empirical research on value creation and value appropriation (Adegbesan and Higgins, 2011; Brito and Miguel, 2017; Lavie, 2007).…”
Purpose
This study aims to investigate whether higher value creation leads to higher value appropriation and to identify the boundary conditions in a buyer–supplier relationship that can explain why a particular supplier can appropriate higher value than others.
Design/methodology/approach
The study uses questionnaire surveys. The sample of the survey has 150 publicly-listed supplier firms in Taiwan. The unit of analysis is the buyer–supplier relationship.
Findings
In the buyer–supplier relationship, suppliers’ bargaining power, partnership and a supplier’s original brand manufacturing (OBM) business can strengthen the positive relationship between value creation and value appropriation.
Research limitations/implications
This study adopts the unilateral viewpoint of suppliers; however, some constructs might require dyadic evaluation. This study only explores the spillover effect of OBM business on the relationship between value creation and appropriation.
Practical implications
The spillover effect of a supplier’s OBM business in a buyer–supplier relationship allows the buyer to share more common benefits and the supplier to capture more private benefits as compensation. By broadening its customer base, a supplier can increase its bargaining power. A supplier can also maintain a strategic partnership with each essential buyer.
Originality/value
To avoid the dark-side effect of partnership, the model provides the contingency that a supplier can capture more value from a buyer–supplier relationship.
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