Abstract
This paper investigates preferences for strategic emphasis in large corporation–small firm relationships and explores how information asymmetry may moderate these preferences. Our findings suggest that information asymmetry plays a crucial role in the development of an equity partnership between large public corporations and small, privately owned, growth-oriented firms. We study 233 instances of equity partnering between large corporations and small firms to investigate the contingency effect of information asymmetry on small firms’ choice of equity partner. Our results indicate that when information asymmetry between the partners is low, small firms choose partners with a strategic emphasis on value creation. Conversely, when information asymmetry is high, small firms tend to choose corporate partners that emphasize value appropriation. This finding suggests that information asymmetry makes small firms wary of entering into equity partnerships and makes them unwilling to partner with corporations that potentially have the most to offer in terms of technological expertise.
| Original language | English |
|---|---|
| Pages (from-to) | 498-504 |
| Number of pages | 7 |
| Journal | Journal of Business Research |
| Volume | 88 |
| DOIs | |
| Publication status | Published - 1 Jul 2018 |
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Keywords
- Equity partnerships
- Information asymmetry
- Strategic emphasis
- Value appropriation
- Value creation
ASJC Scopus subject areas
- Marketing
Cite this
When the fog dissipates : The choice between value creation and value appropriation in a partner as a function of information asymmetry. / Morgan, Todd; Anokhin, Sergey; Wincent, Joakim.
In: Journal of Business Research, Vol. 88, 01.07.2018, p. 498-504.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - When the fog dissipates
T2 - The choice between value creation and value appropriation in a partner as a function of information asymmetry
AU - Morgan, Todd
AU - Anokhin, Sergey
AU - Wincent, Joakim
PY - 2018/7/1
Y1 - 2018/7/1
N2 - This paper investigates preferences for strategic emphasis in large corporation–small firm relationships and explores how information asymmetry may moderate these preferences. Our findings suggest that information asymmetry plays a crucial role in the development of an equity partnership between large public corporations and small, privately owned, growth-oriented firms. We study 233 instances of equity partnering between large corporations and small firms to investigate the contingency effect of information asymmetry on small firms’ choice of equity partner. Our results indicate that when information asymmetry between the partners is low, small firms choose partners with a strategic emphasis on value creation. Conversely, when information asymmetry is high, small firms tend to choose corporate partners that emphasize value appropriation. This finding suggests that information asymmetry makes small firms wary of entering into equity partnerships and makes them unwilling to partner with corporations that potentially have the most to offer in terms of technological expertise.
AB - This paper investigates preferences for strategic emphasis in large corporation–small firm relationships and explores how information asymmetry may moderate these preferences. Our findings suggest that information asymmetry plays a crucial role in the development of an equity partnership between large public corporations and small, privately owned, growth-oriented firms. We study 233 instances of equity partnering between large corporations and small firms to investigate the contingency effect of information asymmetry on small firms’ choice of equity partner. Our results indicate that when information asymmetry between the partners is low, small firms choose partners with a strategic emphasis on value creation. Conversely, when information asymmetry is high, small firms tend to choose corporate partners that emphasize value appropriation. This finding suggests that information asymmetry makes small firms wary of entering into equity partnerships and makes them unwilling to partner with corporations that potentially have the most to offer in terms of technological expertise.
KW - Equity partnerships
KW - Information asymmetry
KW - Strategic emphasis
KW - Value appropriation
KW - Value creation
UR - http://www.scopus.com/inward/record.url?scp=85037606201&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85037606201&partnerID=8YFLogxK
U2 - 10.1016/j.jbusres.2017.11.032
DO - 10.1016/j.jbusres.2017.11.032
M3 - Article
AN - SCOPUS:85037606201
VL - 88
SP - 498
EP - 504
JO - Journal of Business Research
JF - Journal of Business Research
SN - 0148-2963
ER -