Management and Strategy - HKU Business School

25 April

Mastering Anticipatory Impression Management in Earnings Conference: Motivation, Casting, and Market Reactions

SPEAKER

Prof. Helen Hu
Professor of Strategic Management
University of Melbourne

ABSTRACT

This study investigates how Chinese listed firms may use earnings conferences for the purpose of anticipatory impression management (AIM) to proactively build a positive image before the disclosure of financial misconduct. The specific event timeline—after committing financial misconduct but prior to regulators’ misconduct announcement—allows us to predict whether the focal firm uses earnings conferences as an AIM tactic. Additionally, the number of earnings conferences will increase with the severity of the misconduct. Moreover, we unfold the mechanism that shapes the qualitative information delivered through AIM conferences, with a particular emphasis on casting, i.e., the attendance of independent directors. This casting depends on the independent directors’ AIM value for the focal firm and their monitoring capabilities in detecting financial misconduct. Lastly, we posit that AIM conferences will buffer investors’ perceptions of negative events, positively influencing market reactions to misconduct announcements. Drawing on data from all Chinese-listed firms that committed financial misconduct from 2016 to 2020, we identified 122 AIM conferences and provided evidence for our hypotheses.

08 April

CEO Contract Length and Contract Renewal: Impression Management of CSR Engagement

SPEAKER

Prof. Guoli Chen
Professor of Strategy
INSEAD

ABSTRACT

We examine the implications of chief executive officer (CEO)’s initial contract length for corporate social responsibility (CSR). We posit that, faced with greater time pressure to demonstrate their abilities, CEOs with shorter initial contract lengths are more likely than other CEOs to engage in impression management by making CSR efforts to impress their boards of directors. While CSR engagement generally enhances the probability of the CEO’s contract renewal, this effect is particularly strong for CEOs with shorter contracts. Nevertheless, firms with less busy boards are less likely than firms with busy boards to renew CEO contracts based on CSR efforts. Using a sample of U.S. firms with new CEO appointments between 1990 and 2017, we provide empirical evidence to support our theory and hypotheses. Our results are robust to a series of additional analyses, including using the U.K.’s Corporate Governance Code reform as an exogenous shock to address potential endogeneity issues. We also find that CEOs with shorter initial contracts are more likely to mention CSR key words in conference calls and engage in more visible CSR. We discuss our contribution to the CEO employment contract, CSR and corporate governance literature.

05 April

The Institutional Origins of the Startup Gender Gap: Evidence from a Regression Discontinuity-in-Time Approach

SPEAKER

Prof. Olenka Kacperczyk
Professor of Strategy and Entrepreneurship
London Business School

ABSTRACT

Women remain underrepresented not only as startup founders but also as joiners. However, limited understanding persists regarding the sources of this disparity. Traditional explanations that focus on individuals and their preferences fail to fully account for the emergence of the gender gap. Shifting focus to institutions, we examine the regulatory origins of women underrepresentation among new venture recruits. Specifically, we theorize that stringent employment protection laws that rachet up termination costs, will diminish women’s chances because startups, compared to incumbents, are less willing to take risks on women. However, when institutional protection becomes less restrictive, allowing for low-cost probationary trials, women’s likelihood of being hired by a startup rather than an incumbent increases more than men’s, potentially narrowing the startup gender gap. Through an analysis of Portuguese registry data from 2009 to 2013 and the application of the Regression in Time Discontinuity Design, we provide support for our assertions. Following the implementation of a reform that reduces the cost of terminating employees, women’s relative chances to join startups relative to joining incumbents increase, especially when firms are provided with scant informational cues for evaluating prospective hires. Overall, our study documents institutional origins of gender disparities in startup hires, while also emphasizing how institutional change can help increase women’s representation among startup hires.

02 April

To Greener Pastures They Go? Employee Responses to Corporate Social Irresponsibility

SPEAKER

Prof. Forrest Briscoe
Professor of Management
Smeal College of Business
The Pennsylvania State University

ABSTRACT

Employees are attracted to firms with socially responsible records, but are they willing to leave when their employer violates environmental or social norms? We theorize that stakeholder violations cause employees to revise how they see their employer such that they disassociate and become more willing to leave their employer after stakeholder violations. We further suggest that an employee’s existing association with their organization and the employer’s record for social responsibility moderate this relationship, as both shape how employees process their employer’s stakeholder violations. Finally, we posit that employees who leave their employer after stakeholder violations will join organizations with records of fewer stakeholder violations. We test our ideas using data on employee departures in 761 of the largest U.S. public companies from 2013 to 2020, constructed from detailed employee job history records. We find considerable support for our theory, showing that violations equivalent to 5% of annual revenues translate into a 4.7% increase in employee departures. This study extends research on the human capital consequences of corporate social (ir)responsibility.

27 March

Privilege and Prejudice: Shareholder Primacy and the Relevance of Social Class Backgrounds for CEO Contenders’ Selection Prospects

SPEAKER

Prof. Abhinav Gupta
Professor of Management
Foster School of Business
The University of Washington

ABSTRACT

Research has found that contenders from upper-class backgrounds are favored for CEO positions over those from humbler origins. However, in the decades since the last analysis was conducted, Corporate America has undergone significant changes that have institutionalized shareholder primacy as the dominant organizing principle. This study examines the implications of these macro-institutional changes. We begin with anticipating a steady amplification of upper-class bias in CEO selection since the 1970s and then examine how inter-firm differences in conformity to shareholder primacy correspond to the heightening of upper-class bias. We hypothesize that firms that have espoused commitment to shareholder primacy in their formal communications or have adopted practices consonant with its tenets will exhibit a stronger preference for upper-class CEO contenders. We then theorize that the influence of shareholder primacy would also manifest through the relative salience of distinct stakeholder groups, hypothesizing that concentrated ownership by affluent shareholders and collective bargaining agreements with unions will amplify and dampen, respectively, the upper-class bias in CEO selection. Using a novel dataset that compares the social class backgrounds of 456 rival candidates who competed in 228 CEO contests from 1970 to 2013, we find considerable support for our hypotheses.

22 March

Network Position and Performance: Advantage or Privilege?

SPEAKER

Prof. Christopher Rider
Thomas C. Kinnear Professor
Associate Professor of Entrepreneurial Studies
Ross School of Business
University of Michigan

ABSTRACT

We reconsider the relationship between an organization’s performance and its position within an inter-organizational network (i.e., the position-performance relationship). We contrast the notion of position as an advantage borne of superior capabilities with that of position as a privilege borne of superior opportunities. We then propose an analytical framework for decomposing the position-performance relationship into positional determinants and consequences. Analyzing data on new firms entering the U.S. venture capital industry’s co-investment network between 2000 and 2017, we reproduce the position-performance relationship associated with advantages in firm capabilities. We also demonstrate that, consistent with privileged opportunities, this relationship is attenuated by accounting for the ascribed (i.e., race, ethnicity, gender) and achieved (i.e., prior education and employment) characteristics of firm personnel at founding. We conclude with a discussion of the assumptions justifying advantage and privilege interpretations of the position-performance relationship.

18 March

On Hiring via Secondary Employment Affiliations

SPEAKER

Prof. Filippo Carlo Wezel
Professor of Management and Organizations
USI Lugano (Switzerland)

ABSTRACT

Our paper establishes the phenomenon of hiring via secondary employment affiliations as an effective practice that organizations leverage when targeting employees of other organizations. Our data-driven exploration of the population of hires among Swedish private sector firms suggests that employers achieve better employment outcomes when hiring via secondary employment affiliations. More specifically larger salary increases, higher chances of promotion, and lower rates of inter-firm mobility are observed among employees hired via secondary employment affiliations compared to conventional hires (i.e., employees hired from another organization without a secondary employment affiliation). These differences appear most pronounced among younger and smaller firms. We elaborate on the conceptual implications of these findings for organizations.

13 March

Female representation and talent allocation in entrepreneurship: the role of early exposure to entrepreneurs

SPEAKER

Prof. Maddalena Ronchi
Assistant Professor of Finance
Kellogg School of Management
Northwestern University

ABSTRACT

Using registry data from Denmark, this paper shows that higher exposure to entrepreneurship during adolescence affects the representation of women and the allocation of talent in this profession. We track the educational and professional choices of one million individuals from adolescence to adulthood and exploit within-school cross-cohort variation in exposure to entrepreneurship, as measured by the share of an adolescent’s peers whose parents are entrepreneurs during the last years of compulsory schooling. We find that early exposure to entrepreneurs encourages girls’ entry and tenure into this profession, while it does not affect the professional choices of boys. The effect is entirely driven by exposure to the entrepreneur parents of female peers and works via a decrease in girls’ likelihood to discontinue education at the end of compulsory school and to hold low-paying jobs as adults. Moreover, the increase in female entrepreneurship is associated with the creation of firms that are better performing and more female-friendly than the average entrepreneurial firm. Taken together, these findings suggest that gender-specific entry barriers, which appear to be both cultural and informational in nature, may prevent some talented female entrepreneurs from pursuing their comparative advantage.

12 March

Economies of Scope and Common Inputs in Production Technology

SPEAKER

Dr. Devesh R. Raval
Bureau of Economics
Federal Trade Commission

ABSTRACT

The dominant theoretical explanation for the existence of large, multi-product producers is economies of scope arising from common inputs across production lines of business. I assess the degree of economies of scope using data from the FTC’s Line of Business surveys, which provide information on inputs at the line of business level as well as common inputs to the firm. I estimate a production function allowing for common inputs and find substantial economies of scope; eliminating the common input would reduce output by 11% for the average firm.

28 February

Demographically Biased Technological Change

SPEAKER

Prof. John-Paul Ferguson
Associate Professor of Organizational Behaviour
McGill University

ABSTRACT

Who gets the jobs that automation creates? From prior studies, a consensus has begun to emerge that said technologies complement rather than substitute for labor. However, they also shift the demand for specific types of skills and other worker competencies. Such shifts imply unequal demographic impacts; but beyond age, such impacts are largely unexplored. We build a unique dataset to examine the establishment-level employment impacts of automation capital stock by race and occupation. We find that most job creation happens among frontline workers, rather than among managers. However, the net frontline changes benefit black and white workers to the detriment of Hispanic workers. Black and Hispanic managers meanwhile decline in absolute numbers. We discuss the research and policy implications of these shifts.