Outside directors' experience, TMT firm-specific human capital, and firm performance in entrepreneurial IPO firms

Le, Son Anh; Kroll, Mark; Walters, Bruce A.

doi:10.1016/j.jbusres.2012.01.001

Cited by 50 publications

(27 citation statements)

References 55 publications

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“…When a pre-IPO management team loses board control fol-lowing the IPO, maintaining its entrepreneurial vision and strategies may prove difficult given the mandate of a new outsider-controlled board. Such possible changes in strategic direction not only adversely affect the development and deployment of TMT firm-specific capabilities, but also dampen TMT motivation (Buchholtz, Amason, and Rutherford 2005;Le, Kroll, and Walters 2013;Sapienza and Gupta 1994;Wiseman and Gomez-Mejia 1998).…”

Section: The Departures Of Pre-ipo Tmt Membersmentioning

confidence: 99%

TMT Departures and Post-IPO Outside Director Additions: Implications for Young IPO Firms’ Survival and Performance

Le¹,

Kroll²,

Walters

2016

Journal of Small Business Management

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We draw on resource-based logic to argue that relatively stable TMTs and boards are beneficial for young IPO firms because of the need to maintain and develop valuable firm-specific capabilities and psychological attachment of pre-IPO TMTs. Using panel data from 272 young IPO firms, we find that pre-IPO TMT member exits negatively affect young IPO firms' survival and performance. This negative effect is greater when more post-IPO outside directors are added. We also find that the above interaction is positively and negatively associated with survival and performance when TMT ownership declines substantially and when firms have a founder CEO, respectively.

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Section: The Departures Of Pre-ipo Tmt Membersmentioning

confidence: 99%

TMT Departures and Post-IPO Outside Director Additions: Implications for Young IPO Firms’ Survival and Performance

Le¹,

Kroll²,

Walters

2016

Journal of Small Business Management

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“…The aim of our investigation is to pursue this line of research in greater depth, introducing the moderator effect of board tenure on the relation between interlocks and firm performance. A board with high average board tenure encourages better relations and greater trust between its members (Le, Kroll, and Walters, 2013), encouraging a mutual and efficient exchange of the vision and strategic resources acquired from other firms. By looking at board tenure therefore, we can analyse the effect of the degree of familiarity and mutual understanding between board members and their essential role in the assimilation and application of the resources that can be gained through interlocks.…”

Section: Introductionmentioning

confidence: 99%

It is useful to consider the interlocks according to the type of board member (executive or non-executive) who posseses them? Their effect on firm performance

Sánchez

Castro

2015

Revista Europea de Dirección y Economía de la Empresa

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a b s t r a c tTaking the assumptions of the resource dependency theory as our starting point, the main objective of this investigation is to gain an understanding of how and in what way board members who serve on multiple boards (interlocks) can affect a firm's profitability, and whether it is useful to consider the derivation of these interlocks according to the type of board member (executive or non-executive) who possesses them. Using dynamic panel data analysis (GMM) and a sample of 88 firms quoted on the Spanish Continuous Market for the period 2005-2008, our results confirm the existence of a curvilinear (inverted-U) relation between interlocks and firm performance. The results demonstrate that this relation is only significant if we include the total number of external ties rather than just the number of links generated by non-executive directors. We can also confirm that the degree of familiarity and shared knowledge between board members (measured by average board tenure) affects this relationship. © 2015 AEDEM. Published by Elsevier España, S.L.U. This is an open access article under the CC BY-NC-ND license (http://creativecommons.org/licenses/by-nc-nd/4.0/). ¿Es útil diferenciar a los interlocks de acuerdo con el tipo de consejero (ejecutivo o no ejecutivo) que los posee? Su influencia sobre el rendimiento de la empresa Palabras clave: Consejos de administración Interlocks Permanencia del consejo Rendimiento de la empresa r e s u m e nPartiendo de los supuestos de la teoría de dependencia de recursos, el principal objetivo de esta investigación pasa por conocer cómo y de qué forma la pertenencia de los consejeros a múltiples consejos (interlocks) podría afectar a la rentabilidad de la empresa y si es importante considerar en esta relación la procedencia de los interlocks según la tipología del consejero que lo ostente (consejeros ejecutivos y no ejecutivos). Mediante un análisis de datos de panel dinámico (GMM), y a través de una muestra de 88 empresas cotizadas en el Mercado Continuo español para el periodo 2005-2008, los resultados obtenidos confirman que existe una relación curvilínea (en forma de U invertida) entre los interlocks y el rendimiento de la empresa, y que esta relación es sólo significativa si tenemos en cuenta el número total de vínculos externos, y no sólo cuando tomamos en número de vínculos generados por los consejeros no-ejecutivos. Asimismo, podemos afirman que el grado de familiaridad y conocimiento mutuo entre los miembros del consejo (medido por la permanencia media del consejo) influye sobre esta relación.

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“…However, the positive impacts of entrepreneurial teams on startup performance have not been found consistently in previous empirical studies (Le, Kroll, & Walters, 2013;Criaco, Minola, Migliorini, & Serarols-Tarré s, 2014). Entrepreneurial teams' influences are found to be highly contextual (Klotz et al, 2014).…”

Section: Introductionmentioning

confidence: 83%

New-Born Startups Performance: Influences of Resources and Entrepreneurial Team Experiences

2018

IBR

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This study examines the interaction effects of entrepreneurial team experiences and resources o n new-born startup firm performance, from a contextual view point of entrepreneurship. The sample is from a longitudinal panel data of Kauffman Firm Survey conducted over the period of 2005-2012 by the Ewing Marion Kauffman Foundation. Results suggest that financial resources have positive impacts on startup firms' profitability; whereas the impacts of initial firm size on profitability are negative. Startups are more likely to be profitable when the firm size is small at the new-born stage. The positive impact of financial resources on profitability is greater when entrepreneurial teams have strong industry experience; whereas entrepreneurial teams' industry experience and intangible resources have a negative interaction effect on profitability. Entrepreneurial team's startup experience has most negative interaction effects on new-born startup firms' profitability. This finding indicates that the entrepreneurial team's startup experience plays stronger roles in venturing profitable startups when the amount of financial resources and initial firm size are small; however, the team's startup experience and intangible resources have positive interaction effects on new-born startups' profitability.

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Outside directors' experience, TMT firm-specific human capital, and firm performance in entrepreneurial IPO firms

Cited by 50 publications

References 55 publications

TMT Departures and Post-IPO Outside Director Additions: Implications for Young IPO Firms’ Survival and Performance

TMT Departures and Post-IPO Outside Director Additions: Implications for Young IPO Firms’ Survival and Performance

It is useful to consider the interlocks according to the type of board member (executive or non-executive) who posseses them? Their effect on firm performance

New-Born Startups Performance: Influences of Resources and Entrepreneurial Team Experiences

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