TY - JOUR
T1 - Financial Implications of Local and Nonlocal Rival Isomorphism
T2 - A Signaling Paradox
AU - Miller, Stewart Robert
AU - Indro, Daniel C.
AU - Richards, Malika
AU - Chng, Daniel Han Ming
PY - 2013/11
Y1 - 2013/11
N2 - We develop an isomorphism-signaling framework to explain the likelihood of isomorphic behavior (and nonconformity) by a focal firm toward local rivals and nonlocal rivals and then predict financial performance associated with the action. In the presence of asymmetric information, we predict a causal relationship between rival isomorphism and financial performance that reveals a paradox-that is, we theorize and show conditions in which "conforming" reflected by rival isomorphic behavior is a signal that "separates" high-quality from low-quality firms. We consider a firm's costs and benefits of local and nonlocal rival isomorphism and assert that a firm can signal its quality, which affects financial performance of the equity offering. We test and find support for our hypotheses using a sample of firms raising capital abroad from 1994 to 2005.
AB - We develop an isomorphism-signaling framework to explain the likelihood of isomorphic behavior (and nonconformity) by a focal firm toward local rivals and nonlocal rivals and then predict financial performance associated with the action. In the presence of asymmetric information, we predict a causal relationship between rival isomorphism and financial performance that reveals a paradox-that is, we theorize and show conditions in which "conforming" reflected by rival isomorphic behavior is a signal that "separates" high-quality from low-quality firms. We consider a firm's costs and benefits of local and nonlocal rival isomorphism and assert that a firm can signal its quality, which affects financial performance of the equity offering. We test and find support for our hypotheses using a sample of firms raising capital abroad from 1994 to 2005.
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U2 - 10.1177/0149206313493323
DO - 10.1177/0149206313493323
M3 - Article
AN - SCOPUS:84885092313
SN - 0149-2063
VL - 39
SP - 1979
EP - 2008
JO - Journal of Management
JF - Journal of Management
IS - 7
ER -