William S. Schulze

EXPLORING THE AGENCY CONSEQUENCES OF OWNERSHIP DISPERSION AMONG THE DIRECTORS OF PRIVATE FAMILY FIRMS

Using an agency-theoretic lens and insights drawn from the behavioral economics and family business literatures, we developed hypotheses concerning the effect of dispersion of ownership on the use ...

A Social Capital Model of High-Growth Ventures

We Use social capital theory to explain how human and social capital affect a ventures ability to accumulate financial capital during its growth stages (before an initial public offering) and its ...

Whither Family Business

The family enterprise is capturing increased interest from scholars around the world. Yet research about family business is in its infancy and the diversity of theories and perspectives represented in the developing literature portray a cluttered and conflicted landscape. In the following, we provide background, discuss the state of the field, and place in context the articles that are featured in this special issue. Critical questions facing the field are also addressed.

Reifying Socioemotional Wealth

We extend recent commentary about socioemotional wealth by reviewing theory and offering suggestions aimed at enhancing the correspondence between the theoretical construct and its empirical correlate. While it is clear that the field has made vast strides since its introduction in 2007, the research literature remains diverse and disjointed: an outcome we attribute, in part, to the use of underspecified research models. We hope our suggestions help researchers establish a robust methodological foundation on which future research can build.

What's your real cost of capital?

This publication contains reprint articles for which IEEE does not hold copyright. Full text is not available on IEEE Xplore for these articles.

But Will it Raise My Share Price? New Thoughts About an Old Question

Abstract In valuing any investment project or acquisition, executives must decide what discount rate to use to estimate the value of the projected cash flows. This paper argues that the traditional approach, which bases its estimate of the company’s cost of capital on the Capital Asset Pricing Model, places the company at risk. Specifically, ‘beta’ is unreliable and captures only a portion of the risk that managers and shareholders agree are important. The authors then offer an alternative measure—reflecting a company’s total risk—that they say provides a reliable estimate and is consistent with the evolving theory of strategic management.

Toward a Pecking Order Theory of Strategic Resource Deployment

A premise of the capabilities perspective in strategy is that firm-specific capabilities allow some firms to be unusually adept at exploiting growth opportunities. Since few firms have the capacity to internally generate the quantity or variety of strategic resources needed to exploit growth opportunities, the ability to externally acquire complementary resources is critical to the acquisition of competitive advantage. However, the external sourcing of resources exposes the firms strategic resources to risks of expropriation. We argue this threat gives capable firms incentive to use internally generated strategic resources to pursue growth opportunities before turning to external sources. A pecking order theory of strategic resource deployment is implied. Data from a 22-year sample of cross-border investment partnership decisions made by U.S.-based venture capital firms lend support to our theory.

Is Venture Capital Really a Local Business? Evidence from U.S. Cross-Border Investment

A collection of specialized pre- and post-investment practices help venture capital firms mitigate the tremendous information and agency problems associated with investment in early-stage startups. However, existing research sheds little light on if, and how, these practices change when investing across borders or the implications for investment performance. This study empirically examines cross-border impact on investment practice and the role local syndicate partners play in that process using a sample of 140,000 rounds of venture capital investment over a 30-year period. Results show little change in U.S. venture capital firm practice when investing across borders, and the addition of a local partner in cross-border deals is negatively associated with investment performance.