 Strategic Decision Making in the Digital Age: Expert Sentiment and Corporate Capital AllocationSteffen Nauhaus, Johannes Luger and Sebastian Raisch Journal of Management Studies, 2021, vol. 58, issue 7, 1933-1961 Abstract: We develop a theoretical perspective on how the increasing data availability in the digital age affects firms’ strategic decisions. Specifically, we explore whether, and under which conditions, external experts’ collective assessment of product‐technology domains impacts firms’ allocation of capital to their strategic business units engaged in these domains. Drawing on decision comprehensiveness theory, we propose that such expert sentiment has informational value for capital allocation decisions, and that this value is contingent on the available information’s determinacy and quantity. We find evidence for our propositions by studying 669 capital allocation decisions made by 85 pharmaceutical firms from 2005 to 2016, and by using supervised machine learning classifiers to analyse expert sentiment in almost 250,000 articles. Our study contributes to the behavioural theory of the firm by showing that, contrary to what scholars traditionally assume, decision makers broaden, rather than narrow, their information processing in comprehensive information environments. Date: 2021 Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:bla:jomstd:v:58:y:2021:i:7:p:1933-1961 Ordering information: This journal article can be ordered from Access Statistics for this article Journal of Management Studies is currently edited by Timothy Clark, Steven W. Floyd and Mike Wright More articles in Journal of Management Studies from Wiley Blackwell |
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