Standing out from the crowd: Dedicated institutional investors and strategy uniqueness

Oehmichen, Jana; Firk, Sebastian; Wolff, Michael; Maybuechen, Franz

doi:10.1002/smj.3269

Cited by 47 publications

(40 citation statements)

References 106 publications

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“…Investment horizon is a key dimension of shareholder influence because the literature reveals that almost every aspect of a shareholder's interaction with a company partly depends on the shareholder's holding period. Shareholders with shorter horizons seem to suffer more from information asymmetry and may steer away from initiatives that are harder to evaluate (Oehmichen, Firk, Wolff, & Maybuechen, 2021), such as innovation-based activities. Shareholders with short horizons may also aggressively intervene in corporate affairs to quickly achieve their intended objectives but provide little knowledge and insight to managers in the process.…”

Section: A Process and Typology For Mapping Shareholder Influencementioning

confidence: 99%

“…David et al (2010), for instance, argued that durable shareholders allow managers and employees considerable discretion as to how to utilize the firm's resources (also see Connelly, Tihanyi, Ketchen, Carnes, & Ferrier, 2017). More recent works suggest that durable investment can make managers “feel less threatened” in general (Oehmichen et al, 2021: 6) and less sensitive (Schulz & Wiersema, 2018) to myopic investment pressures (Zhang & Gimeno, 2016).…”

Section: Shareholder Types and Stakeholder Interestsmentioning

confidence: 99%

“…Another common assumption is that durable shareholders are more capable of collecting and processing information than other types of shareholders (e.g., Lee & O’Neill, 2003). According to this view, the reduced information asymmetry enables durable shareholders to distinguish more accurately the self-interested pursuits that agency theory assumes managers have from well-intentioned investments in stakeholder welfare that aim to maximize long-term financial performance (Oehmichen et al, 2021; Wang et al, 2021). As a result, even though durable shareholders prioritize financial returns, their involvement in corporate affairs can, at times, benefit other stakeholders.…”

Section: Shareholder Types and Stakeholder Interestsmentioning

confidence: 99%

“…Where relevant, such information might influence the trade-offs managers make between the interests of shareholders and other stakeholders. In this vein, Oehmichen et al (2021) suggested that the information durable shareholders provide could be especially useful in areas where evaluating outcomes is difficult, such as CSR.…”

Section: Durable Investment: Long-term Financial Shareholdersmentioning

confidence: 99%

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How Shareholders Impact Stakeholder Interests: A Review and Map for Future Research

DesJardine

Zhang

Shi

2022

Journal of Management

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Research on how shareholders influence the interests of stakeholders has proliferated in recent years, at pace with the active debate on the merits of “stakeholder capitalism.” This research has sought to unpack: (1) the types of shareholders that affect stakeholder-relevant firm outcomes, (2) the mechanisms through which shareholders exert their influence on stakeholders’ interests, (3) the types of stakeholders that are influenced by shareholders, and (4) the factors that moderate the influence of shareholders on stakeholder-relevant firm outcomes. However, this literature is highly fragmented, as it spans the boundaries of various disciplines, draws on different theoretical frameworks, and is based on diverse assumptions. Moreover, exsiting research discusses outcome variables that are relevant to stakeholders, but not from the perspective of stakeholder interests. A comprehensive review of the literature is essential for understanding the heterogeneity of shareholders in terms of their impact on other stakeholders. In the absence of such an endeavor, we systematically review, synthesize, interpret, and critique literature published over the past three decades in leading management, sociology, finance, and accounting journals. Focusing on articles about how shareholders influence stakeholder interests through firms' decisions and outcomes, we chart a promising path for future studies to more fully unpack the complex relationships between shareholders and various other stakeholders.

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Section: A Process and Typology For Mapping Shareholder Influencementioning

confidence: 99%

Section: Shareholder Types and Stakeholder Interestsmentioning

confidence: 99%

Section: Shareholder Types and Stakeholder Interestsmentioning

confidence: 99%

Section: Durable Investment: Long-term Financial Shareholdersmentioning

confidence: 99%

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How Shareholders Impact Stakeholder Interests: A Review and Map for Future Research

DesJardine

Zhang

Shi

2022

Journal of Management

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“…While early research on the role of ownership focused mostly on its concentration (e.g., Amihud & Lev, 1981; Demsetz, 1983; Demsetz & Lehn, 1985; Shleifer & Vishny, 1997), an effort for more fine‐grained understanding of the heterogeneity in owner preferences in relation to specific types of owners surfaced soon after (e.g., Brickley et al, 1988; Bushee, 1998). Subsequent work has differentiated owners based on their national origin (Aguilera & Crespí‐Cladera, 2016; Kavadis & Castañer, 2014; Kavadis & Castañer, 2015; Pedersen & Thomsen, 1997) and continued to study different types of ownership, such as founder, family, corporate, governmental, and institutional (Aguilera et al, 2015; Thomsen & Pedersen, 2000; Tihanyi et al, 2019; Wood & Wright, 2015), even focusing on differences within type, such as long‐term versus short‐term institutional investors (Connelly et al, 2016; Oehmichen et al, 2021), and shareholders investing in competing firms (Azar et al, 2018; He & Huang, 2017).…”

Section: Introductionmentioning

confidence: 99%

Ownership and corporate governance across institutional contexts

Castañer

Goranova

Hermes

et al. 2022

Corporate Governance

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Research Question/Issue: The purpose of this special issue (SI) is to encourage research examining the effect of different ownership types in and from different countries on corporate governance and objectives. Research Findings/Insights: The articles included in this SI provide novel insights as to the influence of different types of owners, including states and sovereign wealth funds, families, and different types of institutional investors, as well as of other features of ownership structures, on various aspects of corporate governance, in a variety of institutional contexts. Theoretical/Academic Implications: As companies face different institutional contexts when they operate internationally, and shareholders have become increasingly global, the resulting heterogeneity of shareholder types poses new challenges in our understanding of their behavior. This SI is a step in the direction of disentangling the complex implications of ownership for corporate governance across institutional contexts. Practitioner/Policy Implications: Together with other owner types, the ever-increasing $100 trillion global asset management industry representing 40% of global market capitalization (PwC, 2020) fuels corporate governance and performance pressures on portfolio companies. The articles included in the SI provide useful insights as to the new ownership landscape and its consequences for operating firms in different countries.

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How the country context shapes firms' competitive repertoire complexity

Steinberg

Hennig

Oehmichen

et al. 2022

Global Strategy Journal

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Research SummaryRecent research has shown that firms' ability to employ complex competitive repertoires can create long‐term competitive advantages. Since research on its determinants has focused on the firm level, we lack an understanding of how country‐level factors impact firms' implementation of complex competitive repertoires. Our cross‐country study addresses this gap by integrating a model of country‐level competitiveness factors with insights from the literature on competitive dynamics and portable governance. We argue that a country context with high‐quality competitiveness factors enables firms to implement complex competitive repertoires. In addition, we hypothesize that firms with foreign investors from countries with high‐quality competitiveness factors can partially compensate for low‐quality factors in firms' domestic context. We found support for our hypotheses in an unbalanced sample containing 1,340 firms from 32 countries.Managerial SummaryEmploying complex competitive repertoires (i.e., diverse and dynamic arrays of competitive actions), such as price reductions or new product introductions, can help firms outcompete their competition. We argue and empirically show that firms' domestic country context, specifically high‐quality governance, factor and demand conditions, related and supporting industries, and strong context for rivalry drive their ability to implement complex repertoires. Moreover, we find that ownership by foreign investors from favorable country backgrounds can partly compensate for firms' weak conditions at home by serving as enabling bridges. Managers who aim to improve their firms' repertoire complexity but are restricted by their domestic country context may consider attracting foreign investors from countries that have what their countries lack.

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Standing out from the crowd: Dedicated institutional investors and strategy uniqueness

Cited by 47 publications

References 106 publications

How Shareholders Impact Stakeholder Interests: A Review and Map for Future Research

How Shareholders Impact Stakeholder Interests: A Review and Map for Future Research

Ownership and corporate governance across institutional contexts

How the country context shapes firms' competitive repertoire complexity

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