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Aligning interests of principals and agents is the most efficient way to reduce the agency conflict. Yet, the literature on executive compensation reveals inefficiencies in providing executives with legal ownership. Thus, the authors go beyond legal ownership and posit that executives' psychological ownership further aligns the interests of executives as agents and shareholders as principals.

The authors employ sophisticated methodology, including dynamic panel data regressions, static panel data regressions and propensity score matching. External validity is achieved through the large-scale sample of 22,179 firm-quarters spanning 24 quarters from 2013 to 2018 of the S&P 1500.

Psychological ownership aligns the interests of executives and shareholders since this mindset makes executives perceive the company as “theirs”. Executives' psychological ownership decreases firms' fraud and financial performance. The decrease in financial performance is related to an observed increase in executives' risk-aversion. Investors recognize this ownership mindset in executives and reward it with a positive market reaction.

The study is the first to consider psychological ownership of executives in relation to firm outcomes such as financial performance or fraud. The findings are of interest to scholars and practitioners, as this study establishes both theoretically and empirically a way to align the interests of principals and agents beyond executive compensation.

The study integrates organizational demography theory into person-environment fit theories to question the assumption that all employees can afford to strive for person-environment fit. The ethnic/racial diversity in organizations is investigated as a boundary condition in order to develop implications to mitigate the challenges of employees with precarious jobs, especially persons of color (POCs), in the society.

Publicly accessible and objective data from organizations in the S&P 1500 index were collected through Compustat, ExecuComp, the Bloomberg Terminal and the websites of Fortune, the United States Census Bureau and the U.S. Department of Labor. A path analysis of time-lagged data was performed to support causal relationships between the examined constructs while controlling for alternative explanations.

Unsafe working conditions moderate the U-shaped relationship between ethnic/racial diversity and turnover and turn it into an inverted U-shaped relationship because employees in precarious jobs, especially POCs, cannot afford to leave unsafe working conditions. Organizations with unsafe working conditions are more likely to invest in sustainability initiatives. However, organizations' financial performance does not benefit from this investment.

The circumstance that not all employees can afford person-environment fit and its organizational outcomes are identified and empirically tested. Scholars can integrate this boundary condition in future research. Implications for practice and policy are also derived.

This study systematically reviews the literature on psychological ownership theory since its inception 30 years ago. Psychological ownership describes why and how individuals inform their identities by taking ownership. The authors provide guidance and support to management scholars to access the field and make meaningful contributions to the literature.

A variety of bibliometric techniques for performance analyses and science mapping is implemented to examine quantitative bibliographic data of 178 studies on psychological ownership. The data are obtained from Web of Science. The VOSviewer science mapping framework is employed to perform the analyses.

Co-authorship, citation and keyword co-occurrence networks indicate the social structures, most influential authors, publications and journals, as well as topics of past research and avenues for future investigation in the field of psychological ownership. While the authors of the seminal studies Pierce et al. (2001, 2003) have shaped the field over the past decades, the future of psychological ownership research requires stronger collaborations across the globe to advance the field from the individual level to the group and organization level.

This study is the first to comprehensively analyze the management literature on psychological ownership from a historical perspective using a systematic approach, bibliometric procedures and quantitative data. Insightful guidance and avenues for future investigation are offered to move psychological ownership research forward.

Psychological ownership (PO) theory and extended self theory explain why someone feels like the owner of his/her job or organization. Yet, there is limited prior research examining whether PO differs as an individual versus collective phenomenon, and in different cultural contexts. The authors extend this literature by examining the dimensionality of PO, multiple outcomes and cultural values as boundary conditions.

Data from surveys of 331 supervisors from Mexico and the US were collected to examine the relationships between the theorized constructs. The authors apply two-stage least squares (2SLS) regression analysis to alleviate endogeneity concerns and produce robust results.

Both individual and collective PO (IPO and CPO) are positively associated with organization-based self-esteem (OBSE) and a new outcome, paternalistic leadership behavior. Cultural values are significant moderators with an individualistic orientation enhancing and a power distance orientation attenuating these relationships.

This study extends PO theory and extended self theory by investigating whether IPO and CPO have different outcomes considering contextual differences in cultural values. Additionally, the authors capture the frequency of paternalism instead of its mere occurrence.

Share repurchase programs are the most important form of payout, yet the implications of incomplete share repurchase programs have not been examined in previous literature. This study tests whether incomplete share repurchase programs are seen as a positive or as a negative signal by investors.

The perception of incomplete share repurchase programs by algorithmic traders, institutional investors and analysts is analyzed with structural equation models, seemingly unrelated regressions, propensity score matching and buy-and-hold abnormal returns on data from share repurchase programs in the United States. In contrast to previous literature, algorithmic trading is appropriately estimated as a latent variable, leading to more reliable results. Furthermore, decisions about share repurchases and dividends are appropriately modeled simultaneously and iteratively, based on findings from previous literature.

The results show that sophisticated investors such as algorithmic traders, institutional investors and financial analysts avoid incomplete share repurchase programs over a long-term investment horizon. Thus, incomplete share repurchase programs are interpreted as negative signals. Additional analyses reveal that share repurchase programs are not completed due to insufficient cash flow, as a result of financial difficulties. Overall, this implies that financial managers should be careful to announce share repurchase programs they know cannot be completed, similar to dividends that cannot be maintained over a long-term horizon.

This study is the first to consider incomplete share repurchase programs. The findings are of interest to scholars and practitioners, as this study goes beyond narrow repurchase program announcement windows, and instead focuses on the longer-term investment horizon over the life of the share repurchase program, which is often ignored in prior research.