Determinants of M&A acquisition premium: a social capital perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Huy Will Nguyen ◽  
Zhu Zhu ◽  
Young Hoon Jung ◽  
Dong Shin Kim
Keyword(s):  
Social Capital ◽  
Past Research ◽  
Organizational Level ◽  
Data Set ◽  
Content Type ◽  
Acquiring Firms ◽  
Target Firms ◽  
Valuation Uncertainty ◽  
Acquisition Premium ◽  
Social Capital Perspective

Purpose What determines the level of acquisition premium? This paper aims to investigate the effect of acquirers’ social capital as reflected through their network position (structural holes and network density) on the level of acquisition premiums. Design/methodology/approach This study predicts acquisition premiums using a panel data set of 324 mergers and acquisition (M&A) transactions including 161 unique acquirers over a 21-year timeframe. M&A and alliance information are obtained from the securities data company platinum database; firm financial data are obtained from the COMPUSTAT database. Findings The results show that alliance network social capital provides acquiring firms with information benefits, thus, reducing the acquisition premium. However, such information benefits are also contingent on target valuation uncertainty and acquirers’ structure exploitation tendency. Practical implications Different types of network structures provide different social capital influences: managers should be aware of their advantages and pitfalls when engaging in M&As. The findings suggest that firms should pay close attention to social capital when making decisions regarding acquisition premiums. Originality/value Past research has indicated that acquiring firms tend to overestimate the value of target firms. Still, little attention has been paid to organizational-level social capital in analyzing the determinants of acquisition premiums. This study offers insight into the effect of network structure on M&A acquisition premiums.

Too tied to fail: a multidimensional approach to social capital in crowdfunding campaigns. Evidences from Italian agri-food businesses

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Ulpiana Kocollari ◽  
Alessia Pedrazzoli ◽  
Maddalena Cavicchioli ◽  
Andrea Girardi
Keyword(s):  
Social Capital ◽  
Design Methodology ◽  
Multidimensional Approach ◽  
Data Set ◽  
Content Type ◽  
Different Types ◽  
Linear Regressions ◽  
Practical Implications

PurposeThe authors investigate the contributions of social capital (SC) dimensions (bridging, bonding and linking) in crowdfunding campaigns by comparing the dynamics of agri-food businesses with those of two other sectors – cultural and technological.Design/methodology/approachThe authors develop linear regressions on a proprietary data set of 5,290 projects launched on the Italian platform “Produzionidalbasso.com”, from 2014 to 2020.FindingsThe authors’ findings suggest that combining the three social capital dimensions (bridging, bonding and linking) has a more substantial overall effect on the number of backers involved in agri-food projects than in cultural and technological projects. Agri-food entrepreneurs effectively mobilize all resources embedded in the SC dimensions and therefore create the conditions to develop new ties that financially support the project.Practical implicationsAgri-food entrepreneurs may benefit from those results improving their funding strategies. Therefore, agri-food entrepreneurs can explore and exploit the instruments available on the CFD platform – video and rewards associated with the campaign – gaining more benefit from the backers involved compared with other project categories.Originality/valueThe study proposes a broader perspective regarding SC that encompasses the proponent, the company and the campaign with three different types of ties: bonding, bridging and linking. These SC dimensions can differently shape diverse sectors and this eclectic configuration can differentiate the effects of SC in crowdfunding campaigns. This study pinpoints how crowdfunding determinants change, based on project categories.

Prioritizing Green HRM practices from policymaker’s perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mehrajunnisa Mehrajunnisa ◽  
Fauzia Jabeen ◽  
Mohd Nishat Faisal ◽  
Khalid Mehmood
Keyword(s):  
Decision Making ◽  
United Arab Emirates ◽  
Past Research ◽  
Organizational Level ◽  
Service Firms ◽  
Corporate Environmentalism ◽  
Analytic Hierarchy ◽  
Content Type ◽  
Management Orientation ◽  
Green Human Resource Management

Purpose This study aims to identify and prioritize Green human resource management (GHRM) practices from the policymaker’s perspective in the United Arab Emirates (UAE)-based manufacturing and service sectors to facilitate sustainable environmental performance. Design/methodology/approach Drawing upon the ability–motivation–opportunity (AMO) and corporate environmentalism theory, this study uses the analytic hierarchy process (AHP), a multi-criteria decision-making model, to rank the most influential enablers of GHRM practices. Data were collected from 24 C-suite executives of UAE-based manufacturing and service units. Findings Top management orientation for Green, Green organizational culture and Green corporate strategic planning were the most critical enablers that promote GHRM practices in the UAE’s manufacturing and service firms. Past research has mostly overlooked the strategic variables and focused only on organizational level antecedents based on HR bundles of practices. Research limitations/implications Data were collected only from UAE firms, hence limiting its generalizability. The study shall help organizations operating in emerging countries adopt the best GHRM practices toward Green goal agendas. Originality/value This research provides an AHP framework that can be used to conceptualize and prioritize GHRM practices, which aids in a firm’s Green decision-making and transition toward sustainable Green growth. This study furthers understanding of GHRM practices play out at the various levels-of-analysis within organizations to present a comprehensive paucity of integrative and multi-level studies over recent years. The study may be relevant for other organizations in other national contexts with similar governance homogeneity.

Assessing the impact of knowledge management on total factor productivity

2019 ◽  
Vol 11 (1) ◽  
pp. 134-146 ◽  
Author(s):  
Mina Sami ◽  
Randa El Bedawy
Keyword(s):  
Knowledge Management ◽  
Total Factor Productivity ◽  
Current Literature ◽  
Organizational Level ◽  
Factor Productivity ◽  
Data Set ◽  
Content Type ◽  
Financial Indicator ◽  
Percent Increase ◽  
The Impact

Purpose The purpose of this paper is to examine the impact of knowledge management (KM) on the total factor productivity (TFP) at the organizational level in Egypt. Design/methodology/approach Using the novel available EC 2013 data set, which includes approximately 60,000 private organizations in Egypt, the paper explores the relationship between KM and TFP. For the purpose of dealing with endogeneity, the two-stage least squares econometric model has been implemented. Findings The study reveals that KM impacts positively the TFP of the Egyptian organizations. Conspicuously, each 10 percent increase in KM is associated with 9.3 percent increase in TFP. Originality/value The role of KM in the organizations has been under-researched globally, especially in Africa. This study contributes to the current literature by assessing the impact of KM on TFP, which represents the most comprehensive measure of the firm productivity; by implementing a novel instrumental variable in order to deal with endogeneity between KM and TFP; and by generating a more nuanced measure for the knowledge intensity that is not based on any financial indicator as in the most of the previous studies. Original findings can be highlighted from the paper as it demonstrates that the impact of KM is more important than proposed by the current literature. Conspicuously, the KM does not merely impact the customer satisfaction, the quality improvement and the profit margin, but it also impacts the TFP of the organizations.

Integration duration of post-merger and leverage dynamics of mergers: theory and evidence

2019 ◽  
Vol 31 (2) ◽  
pp. 208-231
Author(s):  
Yao Cheng
Keyword(s):  
Capital Structure ◽  
Dynamic Model ◽  
Content Type ◽  
Acquiring Firms ◽  
Integration Period ◽  
Target Firms ◽  
Method Of Payment ◽  
Post Merger Integration ◽  
Merger Integration ◽  
Leverage Dynamics

Purpose The purpose of this paper is to examine the effects of the post-merger integration duration on acquiring firms’ leverage behavior before and after a merger, using a dynamic model in which full merger benefits cannot be consumed at the instant of a merger, but rather after a pre-specified post-merger integration period. Design/methodology/approach This paper presents a dynamic model and empirical tests that describe the impact of the post-merger integration period on the capital structure dynamics of the acquiring and target firms before a merger and during the post-merger integration period. By incorporating costs associated with the post-merger integration period, the model can provide new implications for the leverage behavior around the merger. Findings The model generates new implications related to acquiring firms’ leverage dynamics along with method of payment choice. Specifically, the model indicates that the post-merger integration duration is negatively associated with the market leverage of newly-merged firms at the time of merger completion and during the integration period. Further, acquirer managers are more likely to use equity to finance a merger when the integration duration is likely to be lengthy. Originality/value This is the first model in the literature that assumes that both the acquiring and the target firms can change their capital structure overtime, which allows us to analyze both the financing structure and the merger timing. Previous empirical studies also ignore the integration period in the analysis of the method of payment choice and leverage behavior around mergers. In the tests reported in this paper, the authors control for the factors mentioned above and demonstrate that the expected integration duration is not subsumed by those variables implying that it has its own power in explaining the choice of leverage and merger financing method.

Spinoffs and their endowments: beyond knowledge inheritance theory

2016 ◽  
Vol 17 (3) ◽  
pp. 570-589 ◽  
Author(s):  
Andrea Furlan ◽  
Roberto Grandinetti
Keyword(s):  
Social Capital ◽  
Intellectual Capital ◽  
Theoretical Research ◽  
Integrative Approach ◽  
Content Type ◽  
Integrative Framework ◽  
The Social ◽  
Conceptual Paper ◽  
Social Capital Perspective ◽  
Crucial Part

Purpose – The purpose of this paper is to integrate knowledge inheritance theory with the social capital perspective to explain the initial endowments of spinoffs. Design/methodology/approach – The authors maintain that social capital plays a crucial part, both as a mechanism supporting the generation of intellectual capital prior to a spinoff’s foundation, and as an endowment that complements this capital once the spinoff is founded. Knowledge inheritance remains a fundamental mechanism for the formation of a spinoff’s intellectual capital. Its other endowment, social capital, derives from three types of relationship that future entrepreneurs develop within, through and outside their parent firm, all three of which are crucial to the formation of a spinoff’s intellectual capital. Findings – The first result of the theoretical research is an integrative framework of a spinoff’s endowments. Moreover, the authors apply this framework to address two key research questions in the spinoff literature, i.e. whether spinoffs can differ from their parents in terms of intellectual capital; and why spinoffs tend to co-locate near their parents, in geographical clusters. The integrative approach helps to tackle these questions. Originality/value – This conceptual paper offers a more comprehensive explanation of the emergence of spinoffs in terms of their initial endowments than the knowledge inheritance theory.

Institutional shareholder engagement with Japanese firms

2015 ◽  
Vol 1 (1) ◽  
pp. 30-56 ◽  
Author(s):  
Gordon L. Clark ◽  
Sarah McGill ◽  
Yukie Saito ◽  
Michael Viehs
Keyword(s):  
Social Responsibility ◽  
Institutional Investor ◽  
Data Set ◽  
Content Type ◽  
Responsible Investment ◽  
Shareholder Engagement ◽  
Global Standards ◽  
Target Firms ◽  
The Usa ◽  
Multi Method Approach

Purpose – The purpose of this paper is to explore how shareholder engagement on environmental, social, and governance (ESG) issues is informally exercised by a large global institutional investor with locally embedded, geographically remote firms. This field is still a new area of research due to a scarcity of data, and because ordinarily, private engagement activities are conducted confidentially. Therefore, the paper aims to fill this gap in the literature by studying the private corporate engagement activities of a large UK-based institutional investor on ESG issues with Japanese investee firms in order to achieve a greater understanding of the under-researched area of corporate social responsibility. Design/methodology/approach – The authors employ a multi-method approach to analyse engagement activities by the institutional investor. The authors have obtained a unique data set of the institutional investor’s engagement activities. The institutional investor is UK-based, has a long history of active engagement, and is considered one of the oldest and largest specialists in responsible investment. Further, the authors have conducted several in-depth interviews with a UK-based ESG service provider as well as one of the largest Japanese trust companies. Findings – First, it is found that main target firms of engagement activities are large firms with global operations, and that corporate governance issues are the most important engagement topic in Japan. Second, in trying to effectively exercise voice across societies, engagement activities are conducted with geographically remote target firms on various ESG agendas in a self-enforcing, face-to-face, and sometimes collective manner. Finally, this study argues for the gap between the asset manager’s motivation to engage and local target firms’ readiness to respond due to corporate organisational and language issues. Originality/value – The authors contribute to social responsibility literature by focusing on the role of global investors in Japan to diffuse global standards. This area has been largely neglected in this stream of literature, despite the increasing presence of foreign investors in Japan. This is one of the first attempts to analyse a global investor’s engagement strategies with one specific country outside of the USA and Europe. Further, within the literature on shareholder engagement, this is the first paper that focuses on the means of engagement activities and the responses by target firms.

Through the lens of social capital: a research agenda for studying IT outsourcing

2014 ◽  
Vol 7 (2) ◽  
pp. 107-134 ◽  
Author(s):  
Beena George ◽  
Rudy Hirschheim ◽  
Alexander von Stetten
Keyword(s):  
Social Capital ◽  
Research Agenda ◽  
Success Factors ◽  
Past Research ◽  
It Outsourcing ◽  
Future Research ◽  
Content Type ◽  
The Social ◽  
New Research ◽  
Comprehensive Framework

Purpose – This paper proposes a new research agenda for information technology (IT) outsourcing,motivated by the belief that the social capital concept enables IT outsourcing researchers to capture more of the nuances of the client–vendor relationship in IT outsourcing arrangements. Design/methodology/approach – The paper builds a comprehensive framework of social capital based on Nahapiet and Ghoshal (1998) to examine the IT outsourcing life cycle. Past research on IT outsourcing is examined applying the parameters of the framework to identify issues that have been addressed in research on IT outsourcing and to uncover the gaps in past research. Findings – The social capital framework is applied to IT outsourcing which suggests new avenues for future outsourcing research. Research limitations/implications – While past research has identified success factors for IT outsourcing, a significant number of outsourcing arrangement still fail to meet expectations. The research agenda presented in this paper encourages an examination of IT outsourcing from a different perspective to determine how to successfully manage IT outsourcing. Originality/value – The paper provides a new framework that is useful for identifying the relationships among past research in IT outsourcing as well as for identifying potential topics for future research.

scholarly journals Knowledge sharing in online smoking cessation communities: a social capital perspective

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Chenglong Li ◽  
Hongxiu Li ◽  
Reima Suomi ◽  
Yong Liu
Keyword(s):  
Social Capital ◽  
Smoking Cessation ◽  
Knowledge Sharing ◽  
Content Type ◽  
Online Health Communities ◽  
Structural Capital ◽  
The Social ◽  
Health Communities ◽  
Social Capital Perspective ◽  
Practical Implications

PurposeAlthough knowledge sharing in online communities has been studied for many years, little is known about the determinants for individuals' knowledge sharing in online health communities (OHCs) surrounding smoking cessation. Examining the determinants of knowledge sharing in such OHCs from the social capital perspective may prove particularly enlightening.Design/methodology/approachA questionnaire-based online user survey of two smoking cessation OHCs, one based in Finland and one based in China, was performed. Performing data analysis with partial least squares (SmartPLS 3.0), the authors developed a model conceptualizing the structural, cognitive and relational dimensions of social capital as drivers for knowledge sharing in smoking cessation OHCs, with users' stage in giving up smoking as a moderator.FindingsThe results show that structural capital (social ties) and relational capital (reciprocity) are important motivators behind knowledge sharing in smoking cessation OHCs, and the authors found a moderating effect of the stage in quitting on the antecedents' relationship with knowledge sharing in these OHCs.Originality/valueThe study enriches understanding of knowledge sharing in smoking cessation OHCs, contributing to theory and identifying practical implications for such groups' administration.

Cross-border mergers and acquisitions: links between acquiring firm capabilities and resources and target country location

2020 ◽  
Vol 28 (3) ◽  
pp. 355-379
Author(s):  
Ronaldo Parente ◽  
Keith James Kelley ◽  
Yannick Thams ◽  
Marcelo J. Alvarado-Vargas
Keyword(s):  
Target Firm ◽  
Firm Capabilities ◽  
Content Type ◽  
Cross Border ◽  
Acquiring Firms ◽  
Target Firms ◽  
Innovative Capabilities ◽  
Eclectic Paradigm ◽  
Country Selection ◽  
Target Country

Purpose Drawing upon the eclectic paradigm and the regulative dimension of institutional distance theory, it is posited that to understand a firms’ cross-border merger and acquisition (CBMA) location choices, it is critical to examine the acquirers’ ownership advantages. Design/methodology/approach Using a sample of CBMAs undertaken by US firms from 1999 to 2015, the paper explores the extent to which acquiring firm ownership advantages – financial and innovation capabilities – influence target firm country selection in relation to regulative distance. Findings It is shown that acquiring firms with greater innovative capabilities are likely to choose target firms in nations with less regulative distance from their home market; whereas firms with greater financial capabilities target firms in more distant nations. Originality/value This paper builds on the important research on CBMA activity, focusing on the largely neglected pre-acquisition resources in relation to the regulative distance between target firms and the acquirer.

Social inequality and access to social capital in microfinance interventions

2020 ◽  
Vol 40 (7/8) ◽  
pp. 575-588
Author(s):  
Mudit Kumar Singh ◽  
Jaemin Lee
Keyword(s):  
Social Capital ◽  
Social Inequalities ◽  
Group Formation ◽  
Secondary Data ◽  
Social Categories ◽  
Data Set ◽  
Content Type ◽  
Credit Access ◽  
The Social ◽  
Unequal Access

PurposeThe purpose of this paper is to empirically examine the inequality perpetuated through social categories in accessing the social capital generated through the microfinance interventions in India as the country has pronounced economic inequality by social categories like many developing stratified societies.Design/methodology/approachThe study uses survey data collected from 75 villages in rural India and tests whether the formation and maximization of social capital through self-help groups (SHGs) is dominated by social categories, e.g. high-caste groups, males and superior occupation classes. Using logistic regression framework, the study assesses the formation and maximization of social capital through multiple SHG membership.FindingsThe paper finds that the microfinance approach of empowering weaker sections is considerably limited in its success, in the sense that it provides them with the opportunity to the credit access and support through SHGs. But, the empirical model further indicates that social capital in form of these SHGs may fall prey to the dominant social categories, and thus, these institutions may potentially enhance inequality.Research limitations/implicationsThe paper is derived from the secondary data set, so it is unable to comment field reality qualitatively.Practical implicationsMicrofinance policy makers will have an improved understanding of inherent social inequalities while implementing group-based programs in socially stratified societies.Originality/valueSocial capital, if treated as an outcome accumulated in form of groups, provides with an important framework to assess the unequal access through the microfinance interventions. Overlooking the inherent unequal access will deceive the purpose of social justice in the group-based interventions. The microfinance and other welfare policies engaged in group formation and generating the social capital need to be more sensitive to the disadvantageous sections while focusing on multiple group access by disadvantaged social groups.

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