Session 256

Resource Sources and Corporate Strategy: Location, Funding and Advisors

Track F

Date: Monday, October 8, 2012

 

Time: 08:00 – 09:15

Paper

Room: Meeting Room 2.2


Session Chair:

  • Costas Markides, London Business School

Title: Acquisitions by Managers, Investment Bankers and Lawyers: A Triadic Perspective

Authors

  • Johannes Drees, VU University Amsterdam
  • Tom Elfring, VU University Amsterdam

Abstract: Using a multiple-case, inductive study of six acquisitions we examine how investment bankers and legal advisors impact managers decision making during the pre-acquisition process. We find that they use three different sorts of personal and strategic arguments to influence managers’ deal driven. First, at a company level we find that top management may be overwhelmed by the advisors’ experience resulting in suspended animation and integration problems. Second, advisors are sometimes hired by management for legitimacy reasons, and use this to make managers pursue a transaction. Finally, we see that advisors use their network for finding the right targets, and gain knowledge about potential targets and deal prone CEOs. Overall, this offers insights into a possible agency problem as mostly advisors benefit from these transactions.

Title: Connected with Roots, or Attracted to Competition? Strategic Drivers of Location Choices of Indian ITES-Firms

Authors

  • Rajesh Upadhyayula, Indian Institute of Management - Kozhikode
  • Karthik Dhandapani, Indian Institute of Management - Ahmedabad
  • Amit Karna, Indian Institute of Management Ahmedabad

Abstract: Geographic diversification of emerging economy firms as a phenomenon has not been investigated in extant literature. Through an empirical study, we investigate the strategic drivers of multi-cluster location choice of Indian ITES firms in order to improve understanding of their spatial expansion. Using logit regression on the data of 99 firms from the Indian service offshoring sector, we find that ethnic ties and agglomeration density play a significant role in the multi-cluster location choice of firms. Our preliminary findings suggest absence of ethnic ties to be a key driver of multi-cluster presence, and that firms with low levels of competition in their primary cluster moved towards a multi-cluster presence. We also find differences in behavior of multi-locating firms in both evolved and emerging clusters.

Title: Industry Location and Diseconomies of Scope in Multi-Business Firms

Authors

  • Charles Williams, Bocconi University
  • Elena Vidal, Baruch College

Abstract: Strategy scholars have spent decades studying, and questioning, potential coordination economies in diversified firms. In this study, we turn the field’s focus on its head to examine the potential diseconomies of scope in diversified firms. We argue that agglomerated industries are more characterized by “sticky” information, so that firms will find it more costly to operate in two separately agglomerated industries. One important implication of this logic is that corporate monitoring cannot be neatly characterized as financial loss prevention because it also plays an important role in the entrepreneurial processes of a complex firm. We use data on U.S. manufacturing firms from 1972 to 1997 explore whether industry and firm level patterns are consistent with our predictions.

Title: Is Venture Capital a Local Business? A Test of the Proximity and Local Network Hypotheses

Authors

  • William Schulze, University of Utah

Abstract: Venture capital investment has long been conceptualized as a local business, Consistent with this view, existing research confirms that local and geographically distant portfolio firms are sourced, syndicated, funded, and monitored differently. However, emerging research on VC investment practice within the United States finds that distant investments out-perform local investments. These findings raise important questions about the assumed benefits of local network membership and proximity. This study contrasts the deal structure of cross-border VC investment with domestic VC investment, and examines the influence of local partnership on both. Evidence from 139,892 rounds of venture capital financing in the period 1980-2009 suggests that cross-border investment practice, in terms of deal sourcing, syndication, and performance indeed change with proximity, but that monitoring practices do not. Further, we find that the inclusion of a local partner in the investment syndicate yields few benefits

All Sessions in Track F...

Sun: 08:00 – 09:15
Session 123: Capabilities and Corporate Strategy
Sun: 09:30 – 10:45
Session 124: Corporate Strategy and the Role of the Manager
Sun: 11:15 – 12:30
Session 125: Publishing Strategic Management Research
Mon: 08:00 – 09:15
Session 256: Resource Sources and Corporate Strategy: Location, Funding and Advisors
Mon: 09:30 – 10:45
Session 79: Diversification Strategy and Firm Performance
Mon: 13:30 – 14:45
Session 88: Managing Firm Boundaries: Growth, Divestitures and Networks
Mon: 16:30 – 17:45
Session 77: Transformation, Renewal and Corporate Strategy
Tue: 08:00 – 09:15
Session 80: Acquisition Experience, Intensity and Performance
Tue: 11:00 – 12:15
Session 257: Acquisition Performance
Tue: 14:15 – 15:30
Session 86: Corporate Strategy: Expanding Understanding and Knowledge
Tue: 15:45 – 17:00
Session 253: New Insights into Relatedness and Performance


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