Corporate entrepreneurship and market performance

Vivien E. Jancenelle, Susan Storrud-Barnes and Rajshekhar (Raj) G. Javalgi

Management Research Review, 2017, vol. 40, issue 3, 352-367

Abstract: Purpose - The purpose of this paper is to investigate the effects of a firm’s entrepreneurial proclivity on market performance for large, publicly traded US firms. This study draws upon the five-dimensional view of corporate entrepreneurship (CE) and develops hypotheses aimed at understanding the effects of direct effect of CE cues of proactiveness, autonomy, innovativeness, competitive aggressiveness and risk-taking on stock performance during earnings conference calls. Design/methodology/approach - The entrepreneurial orientation of 339 firm post-earnings announcement conference calls is analyzed through a content analysis of transcripts, and the impact of CE cues on stock price is measured using event-study methodology. Findings - The results suggest that the cueing the CE dimensions of innovativeness, risk-taking and especially autonomy have a positive effect on market performance during conference calls, while competitive aggressiveness has a negative effect. No effect was found for proactiveness. Research limitations/implications - The effect of entrepreneurial proclivity on firm value is not uniform. Not all dimensions of CE have a positive effect on market performance at a corporate level, and measuring each dimension of CE separately may be a valuable approach for future research. Practical implications - Firms may create more value when they cue specific entrepreneurial attributes, and cueing competitive aggressiveness may not be desirable. Originality/value - This study fills a gap in the literature by measuring the direct effect of CE cues on market performance through an innovative research design which relies on computer-aided text analysis.

Keywords: Market performance; Information asymmetry; Content analysis; Corporate entrepreneurship; Event study methodology; Earnings conference calls (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eme:mrrpps:mrr-01-2016-0019

DOI: 10.1108/MRR-01-2016-0019

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