“Dear CEO and Board”: How Activist Investors’ Confidence in Tone Influences Campaign Success

2023 | Organization Science | Citations: 0

Authors: Brauer, Matthias; Wiersema, Margarethe; Binder, Philipp

Abstract: Activist hedge funds represent the most potent form of financial activism. Yet w ... Expand

Abstract: Activist hedge funds represent the most potent form of financial activism. Yet we do not fully understand how these activist investors, despite holding only a small stake in target firms, are able to influence management and the board to acquiesce to their demands, especially given the large uncertainty that their demands will improve shareholder value. Building on impression management (IM) theory, we propose that activist investors who express their concerns and demands with high confidence in their letters to target firms are likely to be perceived as knowledgeable and competent by the firm’s other shareholders, thus influencing the response of the firm’s management and board. In support of this theoretical proposition, results of our empirical analysis of 475 U.S. activist campaigns against U.S. companies between 2007 and 2019 suggest that confidence in tone in an activist’s letter, as a form of self-promotion, is positively associated with campaign success. We also observe that the positive association between confidence in tone in activist letters and campaign success is less for activists with greater success in prior campaigns and in campaigns with multiple activists. Our paper contributes to financial activism research by showing that activists’ verbal impression management can serve as an effective influence tactic in their campaigns. Our study also contributes to the emerging research stream on verbal IM by introducing a language attribute, confidence in tone, that has not been studied in management research and is distinct from past constructs examined in verbal IM research. Collapse

Topics: corporate governance strategic management organizational productivity decision making database system

Methods: descriptive statistic qualitative content analysis theory development linguistic analysis regression analysis method

Theories: behavioral theory

The Downside of Displaying Agentic Values: Evidence from Shareholder Activism

2023 | Organization Science | Citations: 0

Authors: DesJardine, Mark R.; Shi, Wei

Abstract: Activist shareholders face a challenging task in preemptively identifying execut ... Expand

Abstract: Activist shareholders face a challenging task in preemptively identifying executives who they perceive might destroy shareholder value—before harm is done. We develop a framework where activist shareholders resolve this problem by forming attributions about executives’ intentions based on their displays of agentic values, which reflect independence and control. For activist shareholders, a strong display of independence can evoke concerns that an executive will act without the regulation of shareholder input, and a strong display of control can create concerns an executive will engineer governance provisions to their own benefit. As such, we hypothesize that above-average agentic value displays by CEOs increase the likelihood firms are targeted by shareholder activists. Extending our theory, we argue the positive effect that agentic value displays have on attracting shareholder activism is stronger when CEOs permit higher spending on corporate and stakeholder investment, both of which can exacerbate shareholder harm when executed poorly. We also posit that activism campaigns driven by CEOs’ agentic value displays will largely come from activist shareholders seeking to exert their own control over agentic-speaking CEOs. Using data on shareholder activism campaigns at US-based companies from 2003–2018, we find support for our hypotheses. We discuss multiple theoretical implications for research on corporate governance, stakeholder management, and investor relations. Collapse

Topics: corporate governance research and development accounting database system Netflix

Methods: descriptive statistic theory development instrumental variables estimation robustness check statistical hypothesis test

Theories: big five model attribution theory behavioral economics

Champions for Social Good: How Can We Discover Social Sentiment and Attitude-Driven Patterns in Prosocial Communication?

2023 | Journal of the Association for Information Systems | Citations: 0

Authors: Mukkamala, Raghava; Kauffman, Robert; Henriksen, Helle

Abstract: The UN High Commissioner on Refugees (UNHCR) is pursuing a social media strateg ... Expand

Abstract: The UN High Commissioner on Refugees (UNHCR) is pursuing a social media strategy to inform people about displaced populations and refugee emergencies. It is actively engaging public figures to increase awareness through its prosocial communications and improve social informedness and support for policy changes in its services. We studied the Twitter communications of UNHCR social media champions and investigated their role as high-profile influencers. In this study, we offer a design science research and data analytics framework and propositions based on the social informedness theory we propose in this paper to assess communication about UNHCR's mission. Two variables-refugee-emergency and champion type-relate to the informedness of UNHCR champions' followers. Based on a Twitter sentiment and attitude corpus, we applied a five-step design science analytics framework involving machine learning and natural language processing to test how the emergency type and champion type impact social communication patterns. Positive and neutral sentiment dominated the tweets of the champions and their followers for most refugee-emergency types. High participation-intensity champions emphasized high-intensity emergencies with tweet patterns reflecting dominant positive or neutral sentiment and sharing/liking attitudes. However, we found that sports figures effects were limited in spreading UNHCR's message, despite their millions of followers. We demonstrate the power of data science for prosocial policy based on refugee crisis awareness and instantiate our methods and knowledge contributions in a research framework that derives knowledge, decisions, and actions from behavioral, design, and economics of information systems perspectives. Collapse

Topics: Twitter social media analytical information system big data application programming interface

Methods: design science BERT natural language processing unsupervised learning artificial neural network

Theories: Lewin's field theory

Catastrophe Bond Trading Can Boost Security Improving Cyber (Re-)Insurance Markets

2023 | Americas Conference on Information Systems | Citations: 0

Authors: Pal, Ranjan; Madnick, Stuart; Siegel, Michael

Abstract: The interdependent and correlated nature of cyber-risk is a cause of failed low ... Expand

Abstract: The interdependent and correlated nature of cyber-risk is a cause of failed low capital cyber (re-)insurance markets to improve cyber-security. In this paper, we propose the use of catastrophic (CAT) bonds as a radical and alternative residual cyber-risk management methodology to alleviate the big supply-demand gap in the current cyber (re-)insurance industry, by boosting capital injection in the latter industry. We lay down conditions under which it is feasible for a cyber-insurer to invest in (a) CAT bonds, and (b) cyber reinsurance services only -both (a) and (b) contributing to dense security-improving cyber insurance markets. Our main result proves that while the use of cyber-CAT bond instruments solves the capital injection problem in cyber (re-)insurance markets to improve enterprise cyber-security, the level of cost to mitigate IT/ICS client information asymmetry (IA) on enterprise cyber-posture is an important factor that can decide the density of cyber-CAT bond trading markets.This lack of much needed capital results in large market inefficiencies in cyber-risk diversification markets that does not allow the huge potential of cyber-insurance products to significantly boost security of enterprises and their ecosystems (Wolff 2022). These viewpoints have also been recently echoed by Zurich chief Mario Greco who feels that enterprise cyber-attacks (especially those on critical infrastructure) might become uninsurable with growing business disruptions due to them, subsequently adversely impacting the ability of residual cyber-risk management solutions to boost cyber-security in enterprise ecosystems 4 .The big question at hand then becomes: is there a way to boost capital injection in cyber (re-)insurance markets for the greater cyber-security benefit of society? We envision that insurance linked security (ILS) solutions such as catastrophe (CAT) bonds might just provide an answer to this all important question. This especially so with Beazley recently announcing the first cyber-CAT bond in January 2023 with the goal to create a dynamic market boosting cyber (re-)insurance services 5 .Research Goal and Contributions -Our research goal is to study the conditions under which a market for cyber-insurance linked securities (CILSs) can prosper to boost significant capital into the enterprise cyber (re-)insurance business. We have argued above on why such a boost is necessary to improve cyber-security in enterprise ecosystems. In other words, our research builds a bridge between the economics of ILS solutions and their impact on cyber-security improvement. Consequently, we propose the following contributions. Collapse

Topics: risk management IT security mobile system internet of things supply chain management

Theories: lemon market theory

Digital Transformation as Collective Social Action

2023 | Journal of the Association for Information Systems | Citations: 0

Authors: Tana, Silviana; Breidbach, Christoph; Burton-Jones, Andrew

Abstract: Digital technologies are reshaping both organizations and our lives as members ... Expand

Abstract: Digital technologies are reshaping both organizations and our lives as members of society. The resulting changes are often referred to as "digital transformation" (DT)-a concept that has proven difficult to define and explain theoretically. This is especially true because the nature and scope of DT is evolving beyond clearly defined organizational boundaries. Today, information technology (IT) is becoming increasingly accessible and relevant for many more members of society, creating the potential for previously unseen transformations beyond organizations. Accordingly, new theoretical lenses are needed to explain how a broader set of social actors instigate and are affected by transformative change induced by IT. We conceptualize DT as collective social action, a novel lens that aims to expand the focus of DT research beyond organizations as its unit of analysis, with a complementary perspective centered on social actors, their actions, and their impact. We delineate a typology of digital transformation as collective social action that considers the locus of transformation (what?), types of social actor(s) (who?), and the underlying mechanisms (how?). Collectively, the four ideal types constitute a new theory to help apprehend, explain, and predict how DT as collective social action occurs within and outside formally defined organizational boundaries. Collapse

Topics: digital transformation information system use Reddit mobile application information exchange

Methods: theory development theoretical contribution design artifact

Theories: fuzzy set theory

Internet and the Digital Economy

2022 | HICSS | Citations: 0

Authors: Gu, Bin

Abstract: ... Expand

Abstract: Collapse

Topics: crowdsourcing online community online learning system video game human resource management

Methods: survey experiment necessary condition analysis econometric modeling machine learning

Theories: theory of affordance

Tokenized index funds: A blockchain-based concept and a multidisciplinary research framework

2021 | International Journal of Information Management | Citations: 0

Authors: Ciriello, Raffaele Fabio

Abstract: In response to the bleak prospects of today’s financial markets, a wave of finan ... Expand

Abstract: In response to the bleak prospects of today’s financial markets, a wave of financial and technological innovations emerges, bringing about potential benefits but also new challenges. For instance, tokenized securities are a new kind of blockchain-based asset enabling price stability, programmability, pseudonymity, and transaction effi­ ciency, while also introducing new regulatory challenges and uncertainties. Conversely, index funds are an established investment device enabling broad diversification in a cost-effective, tax-efficient, and transparent way, while potentially also contributing to concentration of market power, intermediation cost, access barriers for underbanked or impoverished investors, increased market volatility, and human behavioral challenges. This paper conceptually develops Tokenized Index Funds as a hybrid approach that combines the benefits of toke­ nized securities and index funds while alleviating some of their drawbacks. Based thereupon, a corresponding multidisciplinary research framework is presented, with sample research questions along the activities of design and features, business and economics, management and organization, and law and regulation. Collapse

Topics: blockchain cryptocurrency peer-to-peer model

Implications of Priority Access in Markets with Experts: Evidence from Online Marketplace Lending

2020 | International Conference on Information Systems | Citations: 0

Authors: Mahalingam, Anparasan; Alyakoob, Mohammed; Rahman, Mohammad

Abstract: Platform governance mechanisms such as market access control help to align all m ... Expand

Abstract: Platform governance mechanisms such as market access control help to align all market players towards a specific value proposition. Our study focuses on understanding an important market access control mechanism: platform owners granting priority access to a subset of supply-side complementors to grow the marketplace and remove potential demand-side bottlenecks. We study the interplay between priority access and the variation in expertise of the complementors. Leveraging a randomized priority access given to expert institutional investors in online peer-topeer lending industry, we show that it creates negative spillover effect on the performance of crowd retail investors. We provide evidence in support of two mechanisms in driving the impact of priority access, the intensity of priority access and cream-skimming by institutional complementors, on the retail crowd market. Collapse

Topics: crowdsourcing peer-to-peer lending value creation platform governance peer-to-peer model

Methods: experiment statistical hypothesis test

Impact of the Shanghai-Hong Kong Stock Connect on the Performance of A-H Pairs Trading

2019 | International Conference on Information Systems | Citations: 0

Authors: Zhou, Zach Zhizhong; Kang, Sihan

Abstract: The Shanghai-Hong Kong Stock Connect (SH-HK Stock Connect), launched in 2014, is ... Expand

Abstract: The Shanghai-Hong Kong Stock Connect (SH-HK Stock Connect), launched in 2014, is a cross-boundary investment channel that connects the Shanghai Stock Exchange and the Hong Kong Stock Exchange. In this paper, we examine how the SH-HK Stock Connect affects the performance of the A-H pairs trading. The A-H pairs trading is an algorithmic trading strategy for A shares and H shares of the same company, which dual lists its stocks on the Shanghai and Hong Kong stock market. It might seem intuitive that the SH-HK Stock Connect helps to eliminate the inefficiency of stock pricing of dual-listed companies, and thus dramatically reduces the profitability of A-H pairs trading. Surprisingly, we find that the A-H pairs trading strategy is still profitable after the SH-HK Stock Connect. However, the ideal formation period and trading period become shorter. These findings provide important insights to individual traders, hedge fund managers and policy makers. Collapse

Methods: longitudinal research time series analysis parametric test Student's t-test augmented Dickey–Fuller test

Theories: transaction cost economics

Here’s an Opportunity: Knowledge Sharing Among Competitors as a Response to Buy-in Uncertainty

2018 | Organization Science | Citations: 0

Authors: Botelho, Tristan L.

Abstract: Although knowledge sharing among competitors is seemingly counterintuitive, scho ... Expand

Abstract: Although knowledge sharing among competitors is seemingly counterintuitive, scholars have found that competitors share knowledge under certain conditions: among actors who have a preexisting relationship and who expect direct reciprocity. However, there are examples of knowledge sharing among competitors that cannot fully be explained using these relational mechanisms. In this study, I propose that in markets where competitors are a set of key stakeholders, knowledge sharing is a strategic response to high levels of buy-in uncertainty related to a potential opportunity, namely, the likelihood that stakeholders will come to realize the value of a potential opportunity in a timely fashion. Using a unique data set of knowledge sharing among investment professionals on a digital platform, this study leverages variation in the platform’s knowledge-sharing structure to test this theory. I find that knowledge sharing among these competitors is most likely when buy-in uncertainty for a given opportunity is high and that this knowledge sharing does lead to subsequent buy-in. Collapse

Topics: knowledge sharing digital platform IT career pseudonymity competitive advantage

Methods: descriptive statistic theory development qualitative interview ordinary least square qualitative coding