Equity crowdfunding, shareholder structures, and firm performance

This is the author accepted manuscript. The final version is available from Wiley via the DOI in this record.Research question/issue: This paper provides a first-time glimpse into the postcampaign financial and innovative performance of equity-crowdfunded (ECF) and matched nonequity-crowdfunded (NECF) firms. We further investigate how direct and nominee shareholder structures in ECF firms are associated with firm performance. Research findings/insights: We find that ECF firms have 8.5 times higher failure rates than matched NECF firms. However, 3.4 times more ECF firms have patent applications than matched NECF firms. Within the group of ECF firms, we find that ECF firms financed through a nominee structure make smaller losses, whereas ECF firms financed through a direct shareholder structure have more new patent applications, including foreign patent applications. Theoretical/academic implications: Our findings suggest that there are important adverse selection issues on equity crowdfunding platforms, although these platforms also serve as a catalyst for innovative activities. Moreover, our findings suggest that there is a more complex relationship between dispersed versus concentrated crowd shareholders and firm performance than currently assumed in the literature. Practitioner/policy implications: For policy makers and crowdfunding platforms, investor protection against adverse selection will be important to ensure the sustainability of equity crowdfunding markets. For entrepreneurs and crowd investors, our study highlights how equity crowdfunding and the adopted shareholder structure relate to short-term firm performance.Research Foundation—Flander

If you are satisfied tell your friends, if not tell us: the impact of soliciting feedback on customers’ behavioral intentions

With challenges such as increased competition and cost reduction, managers have become more focused on process improvement. Process improvement is a strategic approach to improving products, services and processes. It goes beyond getting temporary recoveries, and seeks to make the service delivery efficient and effective truly understanding value and the root causes of defects or process failure. In this context, customer feedback can help to identify the weaknesses of the service rendered. Expressing process improvement strategically and thereby asking customers to make their complaints and suggestions may have a positive impact on behavioral intentions. Recent research has demonstrated that communicating about new process recoveries that were based on received complaints, increased customers’ behavioral intentions towards the firm (Van Vaerenbergh et al., 2013). The focus of this research, however, is on the impact of soliciting customer feedback itself. More precisely, explicitly asking for all types of feedback in order to increase the overall quality of products/services and its delivery can be considered as a signal of customer care. This approach is different than Van Vaerenbergh et al. (2013) in the following ways: (i) it is a proactive way of asking for feedback, instead of a mere reaction to expressed complaints, (ii) it involves the solicitation for feedback, as contrasted with unsolicited complaints, and (iii) as such, it can involve other types of (minor) complaints or irritations that were not worth the effort to unsolicitedly complaining for (Van Looy et al., 2003) and non complaints such as ideas or suggestions for improvement. Accordingly, we extend service management knowledge by developing and testing hypotheses for the dynamics between this strategic communication and the loyalty intention of the customer, the positive word-of-mouth intention and the propensity of complaining

CEO duality and apprentice successions: exploring the role of leadership structure in impression management

This study contributes to the CEO duality and impression management literature by exploring the role of leadership structure in impression management behavior. Drawing on agency theory and the earnings management literature, we explore impression management within duality and apprentice successions under conditions of underperformance. Based on a sample of underperforming CEO succession events at S&P 500 companies from 2002 to 2007, we find that (1) an individual combining the functions of CEO and board leadership position is more likely to engage in impression management, using an overly positive rhetoric about firm performance, (2) the relationship between duality and impression management is weakened when net earnings growth is negative, and (3) successions in which the outgoing CEO remains chair are effective in weakening impression management

Equity crowdfunding : first resort or last resort?

Prior research has focused on the factors that affect funding success on equity crowdfunding platforms, but a detailed understanding of the factors that drive firms to search for equity crowdfunding in the first place is lacking. Drawing on the pecking order theory, we argue that firms list on equity crowdfunding platforms as a “last resort”—that is, when they lack internal funds and additional debt capacity. In line with the pecking order theory, the empirical evidence shows that firms listed on equity crowdfunding platforms are less profitable, more often have excessive debt levels, and have more intangible assets than matched firms not listed on these platforms. We discuss the implications for theory and practice

Service quality and loyalty behavior in professional business services: an operations based perspective to effective service management

This research proposes for the first time an operation-based client perspective of service quality to enable effective service management in professional business services, in particular within occupational safety, health and environment service firms. In so doing, this study responds to increasing calls from academics (e.g., professional service operations management scholars) and practitioners to move beyond the traditional service quality models when deciding how to manage professional business services. Building on the resource based view, the signalling theory, and the bounded rationality theory, we suggest a number of refinements to existing conceptualizations of service quality and empirically examines the effects of service quality dimensions on loyalty behaviour (purchase and recommending intentions). The results show that information quality (how recommendations are formulated and structured, and the technological system through which the information is delivered to the business client) rather than the people factor (the competence and operating agility of professionals) is the key success factor in service operations management, thereby supporting a resource-strategy contingency fit. The results contribute to knowledge on service quality in professional business services and the implications of opaque service quality in professional business services

Toward a better understanding of service quality in business-to-business professional service organizations

status: accepte