Session 117

Heterogeneous Owner Types and their Influence

Track O

Date: Tuesday, October 9, 2012

Track M

Time: 11:00 – 12:15

Paper

Room: Meeting Room 2.2


Session Chair:

  • Arun Tripathy, Management Development Institute (MDI),

Title: Bank Loan Debt as a Hybrid Governance Mode for R&D Investment

Authors

  • Barclay James, San Francisco de Quito University
  • Jean McGuire, Louisiana State University

Abstract: From a transaction costs perspective, equity has been viewed as having firm-like (i.e., hierarchical) qualities and debt has been viewed as having market-like qualities. Recent research notes the heterogeneity of debt, and views bonds as transactional and bank loans as relational, where bank loan debt then serves as a more efficient governance mode for R&D investment than does bond debt. In this paper, we view equity as firm-like, bond debt as market-like, and bank loan debt as hybrid-like. We theorize and find evidence consistent with the view that bank loan debt as a hybrid is more firm-like (market-like) and thus better (worse) to govern R&D investment when firms are owned (not owned) substantially by banks, where monitoring and adaptability (via forbearance) off-set the organizational costs of bank debt relative to bonds.

Title: Diversification and Ownership: Exploring Differences Between the Diversification Strategies of Family Versus Non-Family Firms

Authors

  • Kimberly Eddleston, Northeastern University
  • Todd Alessandri, Northeastern University

Abstract: We seek to understand the factors that can influence varying diversification strategies across both product and geographic markets for family versus non-family firms. Specifically, we adopt a behavioral theory perspective to derive our hypotheses. We explore how the business risk associated with product and international diversification influences the diversification strategies of family and non-family firms. We then examine how these relationships are moderated by the firm’s performance relative to target, threat of bankruptcy and organizational slack. Our preliminary findings show a marginal positive relationship between family ownership and product diversification, and a strong negative relationship between family ownership and international diversification. Furthermore, performance relative to aspirations and potential slack moderate the link between family ownership and international diversification.

Title: Impact of Ownership Structure on Choice of Expansion Mode

Authors

  • Arun Tripathy, Management Development Institute (MDI),
  • Rejie Pallathitta, Indian Institute of Management-Bangalore

Abstract: This study examines the impact of ownership structure on the firm’s choice of its expansion mode. The expansion modes provide different options to firms and help them to build different capabilities. Prior studies have not considered the impact of ownership structure on the choice of expansion modes. Multinomial logistic regression (MLR) model have been used to test 1830 expansion mode decisions (in the period 2000 – 2007) announced by 996 firms. Empirical evidence shows strong relationship between ownership structure and the choice of expansion mode. Results show that acquisition mode of expansion is preferred by foreign owners and firms belonging to business groups. This study highlights the importance of ownership structure and brings out the need to consider this variable in future studies of expansion modes.

Title: Portfolio Restructuring in Family and Founder-Controlled Firms

Authors

  • Seemantini Pathak, University of Missouri - St. Louis
  • Francesco Chirico, Jönköping University
  • Robert Hoskisson, Rice University
  • Marianna Makri, University of Miami

Abstract: This proposal examines how family and founder-controlled firms differ from mixed ownership firms, and from each other, in their portfolio restructuring (divestitures as well as acquisitions) behavior. Such firms face few problems arising from principal-agent opportunism. However, their concentrated ownership increases the likelihood of principal-principal opportunism. The prevalence of principal opportunism may be stronger in family firms as they also value the family’s socio-economic wealth strongly. We theorize how considerations relating to socio-economic wealth would influence similarities and differences in the restructuring behavior of family and founder-controlled firms, and test our hypotheses on a sample of 246 family, founder and mixed-ownership firms.

All Sessions in Track O...

Sun: 08:00 – 09:15
Session 119: Strategic Leadership
Sun: 09:30 – 10:45
Session 120: Corporate Governance
Sun: 11:15 – 12:30
Session 122: Strategic Leadership and Corporate Governance Complementarities: Why we Are an IG
Sun: 15:15 – 16:30
Session 107: The Benefits of Experience: Vicarious and Otherwise
Mon: 08:00 – 09:15
Session 106: Why do Firms do Bad Things and What Do We Know about It?
Mon: 09:30 – 10:45
Session 103: Reputation: Organizational and Individual Dimensions
Mon: 13:30 – 14:45
Session 112: CEO and TMT Turnover: Firm Implications
Session 214: CEOs and Leadership
Mon: 16:30 – 17:45
Session 113: Large Shareholders are Doing it for Themselves
Tue: 08:00 – 09:15
Session 115: Board Member Characteristics and Board Diversity
Session 137: CEO Human Capital: Take a Little off the Top
Session 254: Capital Markets and Efficiency
Tue: 11:00 – 12:15
Session 111: Why Boards Look the Way They Do: Director Selection
Session 117: Heterogeneous Owner Types and their Influence
Tue: 14:15 – 15:30
Session 108: CEOs Matter, Don\'t They?
Session 116: Discretion and Compensation
Tue: 15:45 – 17:00
Session 114: Adoption of a Practice and its Implications
Tue: 17:30 – 18:45
Session 118: The TMT as a Unit
Session 215: CEO Personality and Characteristics Influencing Decision Making

All Sessions in Track M...

Sun: 08:00 – 09:15
Session 126: Entrepreneurship & Stakeholders - The Future Research Agenda
Sun: 11:15 – 12:30
Session 276: Performance Measurement Tools: A Review of Progress
Mon: 08:00 – 09:15
Session 106: Why do Firms do Bad Things and What Do We Know about It?
Mon: 09:30 – 10:45
Session 15: Human Factors in Stakeholder Strategy
Mon: 13:30 – 14:45
Session 12: Effective Stakeholder Management
Session 138: Value Creation & Appropriation: Take the money and run
Mon: 16:30 – 17:45
Session 113: Large Shareholders are Doing it for Themselves
Tue: 08:00 – 09:15
Session 11: Stakeholders and Corporate Social Performance
Tue: 11:00 – 12:15
Session 117: Heterogeneous Owner Types and their Influence
Tue: 14:15 – 15:30
Session 182: Challenges for Stakeholder Management
Tue: 15:45 – 17:00
Session 10: Stakeholders and Crisis Performance
Tue: 17:30 – 18:45
Session 13: The Problem of Performance in the Theory of the Firm:


Strategic Management Society

Prague