Impact of Connections Within the Top Management Team on Managerial Turnover, Earnings Management, and Voluntary Disclosure
AuthorKwack, So Yean
Committee memberBasu, Sudipta, 1965-
Gordon, Elizabeth A. (Associate professor)
Management Earnings Forecasts
Top Management Team
Permanent link to this recordhttp://hdl.handle.net/20.500.12613/1676
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AbstractThe top management team is important to understand as the executives within the top management team would have long-term implications for a firm's investment, operating and financing decisions which would affect the firm value. As these executives may have pre-existing connections outside the current firm, they are likely to be affected by these connections within the top management team. In this dissertation, I draw upon the literature in sociology that discusses different mechanisms of connections; 1) better information transfer, 2) cohesion and better coordination, and 3) favorable treatment to see how the connections within the top management team affects different decisions for the firm using data from 1999 to 2013. First, I find that the executives with connections to the CEO are less likely to be forced out and those with social connections to the CEO enjoy less sensitivity of involuntary turnover to performance. Notably, I find that this is consistent with CEOs favorably treating the connected executives rather than CEOs keeping connected executives for the benefits. Second, I find that firms with greater percentage of executives with connections to the CEO have greater accruals earnings management and lower likelihood of detection of accounting manipulations. I also show that the connections have an effect only when the joint tenure between the CEO and the executives are short. Finally, I document that firms with more closely connected top management team issue management earnings forecasts in a more precise form and issue more frequent and accurate forecasts. I show that this matters more when the top management team’s external network size is small.
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Resources: The effect of Top Management team characteristics and outside influences on the knowledge management of small entrepreneurial firmsHamilton, Robert D. (Robert Devitt); Mudambi, Ram, 1954-; Zeitz, Gerald Joseph, 1942-; Blackstone, Erwin A., 1942-; Di Benedetto, C. Anthony (Temple University. Libraries, 2009)This study examines small entrepreneurial firms and factors that influence their level of knowledge management and knowledge creation. The dissertation investigates the effect of top management team as a resource in small entrepreneurial firms. Stepping outside of the internal resources of a firm, this paper also delves into the effect of outside sources of capital and knowledge of firm knowledge creation. The paper enriches research on the factors that increase knowledge creation and knowledge management of small entrepreneurial firms. First, in response to evidence that Top Management Team (TMT) characteristics affect performance of high technology firms, this examined TMT average age, education and founder presence effect on the research and development (R&D) intensity, in a cross-sectional sample of software and pharmaceutical firms, with IPOs between the years 2002 and 2004. Average education is positively associated with R&D intensity. The interaction of TMT education and TMT average age negatively affects R&D intensity. TMT education in founders is positively associated with R&D intensity. The first set of results enriches extant research on TMT characteristics’ effect on R&D intensity, which ultimately affects firm performance. Continuing, extant research posits that the research and development (R&D) intensity of firms is highly correlated with knowledge creation as measured by patent citation. This paper argues that there are unexplained variables that moderate the effectiveness of research and development knowledge creation. Using the resource-based view, the top management team (TMT), is examined as an intangible asset. Hypotheses are developed on how high-technology firms’ creation of knowledge, operationalized as their patent citations output, is affected by the TMT characteristics of average age, education level, education background, founder presence, and TMT industry experience. The findings show that TMT education background and TMT industry experience are significant influences on firm patent citation. When controlling for the TMT variables, R&D intensity was not significantly related to patent citation. Finally, research on research and development intensity demonstrates a strong association with patents. At the same time, there is an unexplained gap in the move from research and development to patents in explaining innovation. Prior research assumes that internal resources are preeminent, ignoring the role of external factors. This paper reviews outside resources to assess their effect on patent citation and patent rates. It was found that partnerships with universities and firm geographic location improve innovative activity, whilst grants from the government and partnerships with large firms are not significantly associated with innovative activity. The Board of directors (BOD) has no significant impact on innovative activity. In terms of interaction effect, BOD has a negative interaction effect with geographic clusters. This paper enriches research on the outside resources that increase innovative activity.
LONG-AND SHORT-RUN STRATEGIC DECISIONS OF HOTELS: DIFFERENTIATION AND PRICINGRoehl, Wesley S.; Drayer, Joris; Li, Yan; Lee, Seul Ki (Temple University. Libraries, 2018)Developing a good strategy is important in today’s competitive and commoditized lodging market. A good strategy necessitates knowledge of what strategic actions can increase firms’ profits and maintain their profitability throughout market cycles. However, less research effort has been made to date to find and operationalize strategic actions of hotels that lead to higher performance. This dissertation empirically examines both short-and long-run strategic decisions of hotels and their consequences at the micro level, the result of which can be used to develop a good strategy ensuring sustainable success in business. The first part of this dissertation investigates the effect of conformity and differentiation on performance and performance risk of hotels, focusing on their long-run strategic tools—location, capacity, and quality. The second part of this dissertation examines the efficacy of hotels’ room rate discounts in performance recovery after a crisis, in which the price is a hotels’ short-run strategic tool. Using standard econometric methods and applicable variations, this dissertation found empirical evidence supporting hypotheses in both parts of the dissertation.
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