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Spin-offs, as “popular” corporate restructuring mechanisms in the USA, aim to boost the shareholder value after the separation of a subsidiary/division from its divesting (parent) company. The role of the board, as a “vital” governing mechanism, in the success of these spun-off subsidiaries (child firms) is very critical because directors must ensure that they can provide these recently independent entities with their in-depth expertise, knowledge, industry experience, corporate connections and other resources so that adapting to their “new” market conditions will not be problematic. The purpose of this study is to examine whether two board demographic characteristics (namely, board members’ age and external directorships) along with their interaction affect the child firm’s market valuation, which extends previous work on the board of directors and corporate spin-offs. The theoretical arguments are grounded in resource dependence and upper echelons theories.

The sample included 136 completed spin-offs between 2000 and 2014. The data on board characteristics were collected by using companies’ proxy statements available on the securities and exchange commission website whereas firm and industry characteristics were collected by using the Compustat database.

The author has found that considered independently, board members’ average age and external directorships show positive and significant relationships with the change in market valuation of the child firm; however, the interaction effect of both variables appears to lessen this effect but remains significant.

The authors have shown that while the main effects of both board-level variables have positive and significant effects on the market performance of spun-off subsidiaries (as hypothesized), their interaction will make this effect go in the opposite direction.

Corporate spin-offs have become more popular as a restructuring technique in recent decades. The market performance of these spun-off subsidiaries has been considered critical, as positive market signals are vital to the success of these newly independent firms. Drawing on both the stewardship and resource dependence theories, this study aims to examine how two critical governance characteristics (namely, CEO duality and board size) affect the change in the market valuation of spun-off subsidiaries. This study proposes that both board size and CEO duality of spun-off subsidiaries should positively influence the change in market valuation.

This study used the SDC Platinum database to identify completed corporate US spin-offs between 2000 and 2014. To ensure consistency across spin-off events, this study included only those in which 100 percent of outstanding shares of spun-off subsidiaries were distributed. The study confirmed the SDC Platinum listings using online resources such as The Wall Street Journal and Lexis/Nexis. The study used weighted least square (WLS) regression to test all the proposed models.

This empirical analysis of 134 US-based spin-offs supported both main hypotheses. Furthermore, the analysis also finds that firm size has significant moderating effects on the link between governance structure and market performance.

These findings contribute to the governance literature on corporate spin-offs by advancing our understanding of the role of CEO and board characteristics in improving these subsidiaries' market valuation, as well as the moderating effect of the firm size.

This study investigates how small firms develop preferences for varying levels of alliance partner diversity by applying a behavioral perspective.

Data were collected via an original survey administered by the Swedish National Bureau of Statistics (SCB) of 1,026 Swedish firms with 50 employees or less. Hypotheses were tested by specifying a series of fractional response regressions.

The results show a U-shaped relationship between experienced and preferred alliance partner diversity in small firms and further show moderating effects of firm age, prior growth and environmental dynamism. The findings suggest that preferences towards diverse alliance portfolios in small firms may arise, not only from well-informed deliberate strategic thinking based on prior experience, but also as a consequence of cognitive bias.

The findings suggest that (1) small firms considering a wide variety of alliance partners should carefully investigate whether they are, in fact, capable of mastering a highly diverse alliance portfolio or if they are overconfident novices. (2) Holders of homogenous alliance portfolios should recurringly investigate whether homogeneity is due to informed strategy or inertia.

This study contributes to the literature on alliance partner diversity and behavioral alliance portfolio configuration by shedding light on the learning mechanisms that shape alliance portfolio strategies of small firms by explicating the complexity of how different experience levels of partner variety affect current alliance portfolio preferences.

The affordable loss (AL) heuristic, as one crucial sub-dimension of effectuation, delineates the maximum level of investment entrepreneurs are ready to lose in a worst-case scenario. Conflicting conceptualizations remain regarding whether entrepreneurs’ psychological traits matter for AL. Based on the narcissistic admiration and narcissistic rivalry perspective, this study investigates the relationship between chief executive officer (CEO) narcissism and AL behaviors.

Using data collected from the CEOs and paired vice presidents at 122 small and medium enterprises (SMEs) in mainland China, the authors intend to further explore the association between psychological traits, especially CEO narcissism and AL behaviors under environment and resource constraints (e.g. perceived uncertainty and slack resources).

The findings show that CEO admiration-based narcissism is positively related to AL behaviors in the firm. Furthermore, when firms hold more slack resources, narcissistic admiration has a stronger positive association with AL; while when the environment becomes more uncertain, narcissistic admiration has a weaker positive association with AL. In contrast, CEO rivalry-based narcissism is negatively related to AL behaviors in the firm. When the environment becomes more uncertain, narcissistic rivalry has a stronger negative association with AL.

This article contributes to trait-based effectuation research and suggests that individual psychological traits affect AL behaviors at the firm level, though the patterns of the relationship vary with both the type of narcissism and contexts.