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Management International Review

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01.10.2015 | Research Article

Influence of Managerial Ownership and Compensation Structure on Establishment Mode Choice: The Moderating Role of Host Country Political Risk

verfasst von: Deepak K. Datta, Martina Musteen, Dynah A. Basuil

Erschienen in: Management International Review | Ausgabe 5/2015

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Abstract

Our study draws on arguments advanced in behavioral decision theory to examine the effects of managerial equity ownership and compensation structures on establishment mode choice (the choice between greenfield start-ups and cross-border acquisitions). It is based on a sample of 396 establishment mode choice decisions comprising of 291 cross-border acquisitions and 105 greenfield start-ups by non-diversified US manufacturing firms. Findings indicate that both managerial equity ownership and the proportion of contingent pay in key managers’ compensation structures are associated with the preference for cross-border acquisitions over greenfield ventures. Our analysis also indicates that there is a greater propensity on the part of managers with significant equity ownership to select acquisitions when entry involves host countries characterized by high political risk.

Nächster Artikel The Role of Institutional Environments in Cross-Border Mergers: A Perspective from Bidders’ Earnings Management Behavior

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Titel: Influence of Managerial Ownership and Compensation Structure on Establishment Mode Choice: The Moderating Role of Host Country Political Risk
verfasst von: Deepak K. Datta
Martina Musteen
Dynah A. Basuil
Publikationsdatum: 01.10.2015
Verlag: Springer Berlin Heidelberg
Erschienen in: Management International Review / Ausgabe 5/2015
Print ISSN: 0938-8249
Elektronische ISSN: 1861-8901
DOI: https://doi.org/10.1007/s11575-015-0250-y

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