Investors’ Digital Myopia - The Information Value of Being Digital

Portraying a digital business strategy seems to be what capital markets are looking for in firms. Tech companies raise staggering amounts of capital and long-established companies that announce a digital business strategy double their firm value over night. By drawing from information economics literature, this study investigates drivers and outcomes of a firm’s digital business strategy by utilizing the new construct of a firm-wide digital orientation. Applying a cross-industry longitudinal study, results indicate that initial public offerings provide financial flexibility to drive a firm’s digital orientation. Yet, against expectations, capital markets react negatively to firms depicting a digital orientation post share issuance. We explain this finding on the basis of investors’ digital myopia. Our analysis yields surprising, yet promising results

Get the Crypto Crowd Going: Evaluating the Signaling Effect of Motivational Cues on Crowd Involvement

Numerous blockchain projects employ open-source software development to create innovative solutions in collaboration with the crowd. They rely on the voluntary involvement of OSS developers from the crowd who follow several ideological tenets that shape their motivation. Yet, we lack knowledge on how blockchain projects can address the developers’ motivation to increase the level of crowd involvement. We draw on a unique panel dataset with 1,893 observations to investigate the association between specific intrinsic and extrinsic motivational cues emitted by blockchain project initiators and crowd involvement. Based on signaling theory, we argue that the level of crowd involvement depends on the signal fit of project-initiated motivational cues with the developers’ motivation. We find that higher levels of profit and human interest language relate negatively and higher levels of risk-taking and diversity language relate positively to crowd involvement. Further, our results show that lower quantity of electronic word-of-mouth strengthens these relationships

The Dual Imperative of Digital Transformers – The Relationship between a Firm\u27s Digital Orientation and Innovation Ambidexterity

The disruptive power of digitalization has called into question how we think and theorize about innovation management in a digital context. To thrive in a digital world, companies need to increasingly follow the dual imperative of constantly reinventing themselves while simultaneously refining current viability, that is, achieve innovation ambidexterity. Complementing research that has theorized digitalization as context or outcome of such ambidexterity, we study how a firm’s digital orientation (DO), a strategic posture aimed at realizing vital gains from digital technologies, can function as a driver for resolving the tensions of this dual imperative. In addition, we analyze the roles of absorptive capacity (ACAP) and market turbulence as contingency factors for this relationship. In deriving our hypotheses, we rely on the resource-based view (RBV) and extend our theorizing by building on the dynamic capabilities view. Our research model is empirically tested through multi- industry survey data obtained from 1,474 German firms