Variable Organizational Risk Preferences: Tests of the March-Shapira Model

Miller, Kent D.; Chen, Weiru

doi:10.5465/20159563

Cited by 96 publications

(163 citation statements)

References 32 publications

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“…Since we created performance aspiration variables using the empirical computations of Miller and colleagues (Chen and Miller, ; Iyer and Miller, ; Miller and Chen, ), we followed precedents in this stream to interpret the variables. A negative coefficient on the ‘below aspiration’ variable suggests a larger negative performance gap (i.e., a more strongly negative value) increases new market entry, but a negative coefficient on the ‘above aspiration’ variable means a widening positive performance gap (i.e., a more strongly positive value) decreases new market entry.…”

Section: Resultsmentioning

confidence: 99%

Attainment Discrepancy and New Geographic Market Entry: The Moderating Roles of Vertical Pay Disparity and Horizontal Pay Dispersion

Lim

2018

J Management Studies

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Studies in the behavioural strategy literature have examined the influence of attainment discrepancy on new geographic market entry with inconclusive results. We clarified the relationship between attainment discrepancy and new geographic market entry by considering the moderating effects of managerial pay gaps with concentration on vertical pay disparity and horizontal pay dispersion. The framework also contributes to our understanding of tournament theory and social comparison theory by identifying specified performance contexts under which types of pay gaps conform to or violate theoretical predictions. Empirical analyses based on a panel data of Standard and Poor’s (S&P) 500 firms from 1996 to 2006 showed that our hypotheses are largely supported.

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Section: Resultsmentioning

confidence: 99%

Attainment Discrepancy and New Geographic Market Entry: The Moderating Roles of Vertical Pay Disparity and Horizontal Pay Dispersion

Lim

2018

J Management Studies

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“…The behavioural agency model (BAM) developed by Wiseman and Gomez‐Mejia (1998), which is based on a long stream of research that has flowed from Kahneman and Tversky's (1979) prospect theory (Bowman, 1982, 1984; Fiegenbaum, 1990; Fiegenbaum and Thomas, 1986, 1988) and Cyert and March's (1963) behavioural theory of the firm (e.g. Bromiley, 1991; Miller and Chen, 2004; Singh, 1986), relaxes the inflexible assumption from agency theory that decision makers hold consistent risk preferences, and instead proposes that decision makers utilize a contingency‐based view to allow for the possibility of varied risk preferences depending on the context being faced.…”

Section: Theoretical Framework and Hypothesesmentioning

confidence: 99%

Diversification Decisions in Family‐Controlled Firms

Gómez‐Mejía

Makri

Larraza‐Kintana

2010

J Management Studies

1,009

1,136

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This study examines diversification decisions of family firms and suggests that on average family firms diversify less both domestically and internationally than non-family firms. When they do diversify, family firms tend to opt for domestic rather than international diversification, and those that go the latter route prefer to choose regions that are 'culturally close'. Lastly, we find that family firms are more willing to diversify as business risk increases. The hypotheses are tested using a sample of 360 firms, 160 of them being family-controlled and the rest (200) non-family-controlled. Copyright (c) 2009 The Authors. Journal compilation (c) 2009 Blackwell Publishing Ltd and Society for the Advancement of Management Studies.

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“…Second, we investigated whether the inclusion of the acquirer's market-to-book ratiocalculated as the market value of firm equity divided by its book value (Miller & Chen, 2004)as a proxy for a possible "glamour" effect, influences investor perceptions. It is possible that the firm's market-to-book ratio reflects the firm's motivation and/or ability.…”

Section: Page 26 Of 59 Academy Of Management Journalmentioning

confidence: 99%

Fuzzy Logic and the Market: A Configurational Approach to Investor Perceptions of Acquisition Announcements

Campbell

Sirmon

Schijven

2016

AMJ

220

205

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Prior research on mergers and acquisitions (M&As) has substantially advanced our understanding of how isolated acquirer-and deal-specific factors affect abnormal returns. However, investors are likely to perceive and evaluate M&As holistically-that is, as complex configurations (i.e., Gestalts) of characteristics, rather than as a list of independent factors. Yet, extant M&A literature has not addressed why and how configurations of factors elicit positive or negative reactions. In other words, overlooking the interdependent nature of factors known to influence acquisition success has limited our understanding of both M&As and investor judgment. Taking an inductive approach to addressing this important issue, this study relies on fuzzy set methodology. Our results provide compelling evidence that investor perceptions of M&A announcements are not only configurational in nature but also characterized by equifinality -or the presence of multiple paths to success -and asymmetric causality -that is, configurations that represent bad deals are not simply a mirror image of good deals, but differ fundamentally. By constructing a typology of "good" and "bad" deals as perceived by market participants, we develop a mid-range theory of M&A stock market performance. As such, this study offers novel theoretical and empirical insights to scholars, and implications for practitioners. ABSTRACTPrior research on mergers and acquisitions (M&As) has substantially advanced our understanding of how isolated acquirer-and deal-specific factors affect abnormal stock returns.However, investors are likely to perceive and evaluate M&As holistically-that is, as complex configurations (i.e., Gestalts) of characteristics, rather than as a list of independent factors. And yet, extant M&A literature has not addressed why and how configurations of factors elicit positive or negative reactions. Overlooking the interdependent nature of factors known to influence acquisition success has limited our understanding of both M&As and investor judgment. Taking an inductive approach to addressing this important issue, this study relies on fuzzy set methodology. Our results provide compelling evidence that investor perceptions of M&A announcements are not only configurational in nature but also characterized by equifinality -or the presence of multiple paths to success -and asymmetric causality -that is, configurations that represent bad deals are not simply a mirror image of good deals, but differ fundamentally. By constructing a typology of "good" and "bad" deals as perceived by market participants, we develop a mid-range theory of M&A stock market performance. As such, this study offers novel theoretical and empirical insights to scholars, and implications for practitioners.

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Variable Organizational Risk Preferences: Tests of the March-Shapira Model

Cited by 96 publications

References 32 publications

Attainment Discrepancy and New Geographic Market Entry: The Moderating Roles of Vertical Pay Disparity and Horizontal Pay Dispersion

Attainment Discrepancy and New Geographic Market Entry: The Moderating Roles of Vertical Pay Disparity and Horizontal Pay Dispersion

Diversification Decisions in Family‐Controlled Firms

Fuzzy Logic and the Market: A Configurational Approach to Investor Perceptions of Acquisition Announcements

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