Social capital and business strategy

IF 2.1 Q2 BUSINESS, FINANCE
Brian Lam, Lina Z. Li, Byron Y. Song, Li Yao
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引用次数: 0

Abstract

Purpose

This study aims to investigate the influence of social capital on firms’ business strategies, focusing on Miles and Snow (1978) dichotomy between “prospector” and “defender” strategies.

Design/methodology/approach

The authors perform multivariate regression analyses using a sample of US firms spanning the period from 1995 to 2021. The authors use a two-stage least squares model to alleviate endogeneity concerns and perform several cross-sectional tests and path analyses.

Findings

The authors find a significant and positive association between social capital and defender-type business strategies. Results from cross-sectional analyses reveal that this relationship is more pronounced in highly competitive product markets and among firms led by highly qualified CEOs. In addition, the authors find that CEO compensation mediates the effect of social capital on business strategy. Overall, the results suggest that low social capital regions foster prospector strategies due to managers’ self-maximizing incentives. Finally, the authors find that business strategy acts as a mediating factor, connecting social capital to firms’ financial reporting outcomes.

Social implications

In light of recent public concerns over declining social capital in major economies and the growing globalization and multiculturism in societies, the findings are of interest to policymakers and the wider society by highlighting the far-reaching implications of social capital on businesses and the capital market.

Originality/value

To the best of the authors’ knowledge, this study documents the first empirical evidence on the association between a society’s social capital and firms’ business strategies. The study contributes to the research on the determinants of a firm’s business strategy and extends the literature on the relationship between social capital and firm behavior.

社会资本与企业战略
目的本研究旨在调查社会资本对企业经营战略的影响,重点研究 Miles 和 Snow(1978 年)对 "勘探者 "和 "防御者 "战略的二分法。作者使用两阶段最小二乘法模型来缓解内生性问题,并进行了多项横截面测试和路径分析。研究结果作者发现,社会资本与防御型企业战略之间存在显著的正相关关系。横截面分析结果显示,在竞争激烈的产品市场和由高素质首席执行官领导的企业中,这种关系更为明显。此外,作者还发现,首席执行官的薪酬会调节社会资本对企业战略的影响。总之,研究结果表明,低社会资本地区由于管理者的自我最大化激励而促进了勘探者战略。社会意义鉴于近期公众对主要经济体社会资本下降以及社会全球化和多元文化日益增长的担忧,研究结果强调了社会资本对企业和资本市场的深远影响,因而对政策制定者和更广泛的社会具有意义。该研究有助于对企业经营战略决定因素的研究,并扩展了有关社会资本与企业行为之间关系的文献。
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来源期刊
Pacific Accounting Review
Pacific Accounting Review BUSINESS, FINANCE-
CiteScore
3.80
自引率
9.50%
发文量
36
期刊介绍: Pacific Accounting Review is a quarterly journal publishing original research papers and book reviews. The journal is supported by all New Zealand Universities and has the backing of academics from many universities in the Pacific region. The journal publishes papers from both empirical and theoretical forms of research into current developments in accounting and finance and provides insight into how present practice is shaped and formed. Specific areas include but are not limited to: - Emerging Markets and Economies - Political/Social contexts - Financial Reporting - Auditing and Governance - Management Accounting.
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