Normal view MARC view

Strategy and performance under earnings pressure

Author: Zhang, Yu INSEAD Area: StrategyPublisher: Fontainebleau : INSEAD, 2008.Language: EnglishDescription: 159 p. ; 30 cm.Type of document: INSEAD ThesisThesis Note: For the degree of Ph.D. in management, INSEAD, June 2008Bibliography/Index: Includes bibliographical referencesAbstract: Capital market pressure, especially the pressure to meet analysts' consensus forecast, is an important issue for managers of public firms. However, despite numerous news stories and scholarly articles that this pressure affects firms' strategic behvior and performance, direct empirical evidence is lacking on whether and how earnings pressure changes firms' strategic actions, especially in the context of oligopolistic competition. In an oligopolistic competitive context, competitive actions designed to increase shrot-term earnings may have adverse effects on long-term competitive positions and performance because of the competitive reactions from rivals. Therefore, these important questions merit further study. In this dissertation, I try to answer these questions by developing a theoretical framework and conducting three closely related empirical studies. The framework provides predictions about the impact of earnings pressure on a firm's competitive behavior in an oligopolistic context, and draws performance implications for both the firm and the rivals. I transformed these propositions into testable hypotheses and examined them in three empirical studies in different contexts: . Two single industry studies examining oligopolitic competition under strategic substitutes (output competition in the U.S. electricity industry) and strategic complements (price competition in the U.S. airline industry) . A cross-industry event study exploring the competitive and performance implications of earnings pressure by analyzing how a firm's decisions to go private (which removes earnings pressure) affects their competitors' stock market performance The findings show that a firm under earnings pressure reduces competitive aggressiveness in product market competition and competitors increase their aggressiveness, suggesting negative performance consequence of earnings pressure. The results also highlight the important role of competitive factors such as market structure and organizational factors such as ownership structure and accounting flexibility. List(s) this item appears in: Ph.D. Thesis
Tags: No tags from this library for this title. Log in to add tags.
Item type Current location Collection Call number Status Date due Barcode Item holds
INSEAD Thesis Asia Campus
Archives
Print INSEAD ZHA 2008
(Browse shelf)
900191234
Available 900191234
INSEAD Thesis Europe Campus
INSEAD Publications Display
Print INSEAD ZHA 2008
(Browse shelf)
001243666
Available 001243666
Total holds: 0

For the degree of Ph.D. in management, INSEAD, June 2008

Includes bibliographical references

Capital market pressure, especially the pressure to meet analysts' consensus forecast, is an important issue for managers of public firms. However, despite numerous news stories and scholarly articles that this pressure affects firms' strategic behvior and performance, direct empirical evidence is lacking on whether and how earnings pressure changes firms' strategic actions, especially in the context of oligopolistic competition. In an oligopolistic competitive context, competitive actions designed to increase shrot-term earnings may have adverse effects on long-term competitive positions and performance because of the competitive reactions from rivals. Therefore, these important questions merit further study. In this dissertation, I try to answer these questions by developing a theoretical framework and conducting three closely related empirical studies. The framework provides predictions about the impact of earnings pressure on a firm's competitive behavior in an oligopolistic context, and draws performance implications for both the firm and the rivals. I transformed these propositions into testable hypotheses and examined them in three empirical studies in different contexts:
. Two single industry studies examining oligopolitic competition under strategic substitutes (output competition in the U.S. electricity industry) and strategic complements (price competition in the U.S. airline industry)
. A cross-industry event study exploring the competitive and performance implications of earnings pressure by analyzing how a firm's decisions to go private (which removes earnings pressure) affects their competitors' stock market performance
The findings show that a firm under earnings pressure reduces competitive aggressiveness in product market competition and competitors increase their aggressiveness, suggesting negative performance consequence of earnings pressure. The results also highlight the important role of competitive factors such as market structure and organizational factors such as ownership structure and accounting flexibility.

There are no comments for this item.

Log in to your account to post a comment.
Koha 18.11 - INSEAD Catalogue
Home | Contact Us | What's Koha?