The influence of top management team heterogeneity on the capital raised through an initial public offering

Entrepreneurship: Theory and Practice

Volumn 32, Issue 3, 2008, Pages 391-414

  Zimmerman, Monica A ^a  

^a TEMPLE UNIVERSITY   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 42449139218     PISSN: 10422587     EISSN: 15406520     Source Type: Journal    
DOI: 10.1111/j.1540-6520.2008.00233.x     Document Type: Article

References (107)

1. Allison, P. (1978). Measures of inequality. American Sociological Review, 43, 865-880.
2. Amason, A.C. & Sapienza, H.J. (1997). The effects of top management team size and interaction norms on cognitive and affective conflict. Journal of Management, 213, 495-516.
3. Bantel, K. (1993). Strategic clarity in banking: Role of top management-team demography. Psychological Reports, 73, 1187-1201.
4. Bantel, K. & Jackson, S. (1989). Top management and innovations in banking: Does the composition of the top team make a difference? Strategic Management Journal, 10, 107-124.
5. Barry, C.B., Muscarella, C.J., Peavy, J.W. III, & Vetsuypens, M.R. (1990). The role of venture capital in the creation of public companies: Evidence from the going-public process. Journal of Financial Economics, 27, 447-471.
6. Beatty, R. (1989). Auditor reputation and the pricing of initial public offerings. The Accounting Review, 64, 693-709.
7. Beatty, R.P. & Ritter, J.R. (1986). Investment banking, reputation, and the underpricing of initial public offerings. Journal of Financial Economics, 15, 213-232.
8. Beatty, R.P. & Zajac, E.J. (1994). Managerial incentives, monitoring, and risk bearing: A study of executive compensation, ownership, and board structure in initial public offerings. Administrative Science Quarterly, 39, 313-335.
9. Blau, P. (1977). Inequality and heterogeneity: A primitive theory of social structure. New York: The Free Press.
10. Boeker, W.H. (1988). Organizational origins: Entrepreneurial and environmental imprinting at the time of founding. In G.R. Carroll (Ed.), Ecological models of organizations (pp. 33-51). Cambridge, MA: Ballinger Publishing Company.
11. Brav, A. & Gompers, P.A. (1986). Equity issues and offering dilution. Journal of Financial Economics, 15, 61-89.
12. Brav, A. & Gompers, P.A. (1997). Myth or reality? The long-run underperformance or initial public offerings: Evidence from venture and nonventure capital-backed companies. The Journal of Finance, 52(5), 1791-1821.
13. Brouthers, K.D., Brouthers, L.E., & Werner, S. (2000). Influences on strategic decision-making in the Dutch financial services industry. Journal of Management, 26(5), 863-883.
14. Carpenter, M. (2002). The implications of strategy and social context for the relationship between top management team heterogeneity and firm performance. Strategic Management Journal, 23, 275-284.
15. Carpenter, M., Pollock, T., & Leary, M. (2003). Testing a model of reasoned risk-taking: Governance, the experience of principals and agents, and global strategy in high-technology IPO firms. Strategic Management Journal, 24(9), 802-820.
16. Carpenter, M.A., Geletkanycz, M.A., & Sanders, W.G. (2004). Upper echelons research revisited: Antecedents, elements, and consequences of top management team composition. Journal of Management, 30(6), 749-778.
17. Carter, R.B., Dark, F.H., & Singh, A.K. (1998). Underwriter reputation, initial returns, and the long-run performance of IPO stocks. Journal of Finance, 53, 285-311.
18. Carter, R.B. & Manaster, S. (1990). Initial public offerings and underwriter reputation. Journal of Finance, 45, 1045-1067.
19. Certo, S.T. (2003). Influencing initial public offering investors with prestige: Signaling with board structures. Academy of Management Review, 28(3), 432-447.
20. Certo, S.T., Covin, J.G., Daily, C.M., & Dalton, D.R. (2001). Wealth and the effects of founder management among IPO-stage new ventures. Strategic Management Journal, 22, 641-658.
21. Certo, S.T., Daily, C.M., & Dalton, D.R. (2001). Signaling firm value through board structure: An investigation of Initial Public Offerings. Entrepreneurship Theory and Practice, 26(2), 33-50.
22. Chandler, G. & Hanks, S. (1998). An investigation of new venture teams in emerging businesses. In P.D. Reynolds, W.D. Bygrave, S. Manigart, C.M. Mason, G.D. Meyer, H.J. Sapienza, & K.G. Shaver, (Eds.), Frontiers of entrepreneurship research. Available at http://www.babson.edu.entrep/fer/papers98/X/X_B/X_B.html, accessed 17 March 2008.
23. Chang, S.J. (2004). Venture capital financing, strategic alliances, and the initial public offerings of Internet startups. Journal of Business Venturing, 19(5), 721-741.
24. Child, J. (1974). Managerial and organizational factors associated with company performance. Journal of Management Studies, 11, 13-27.
25. Clark, J.M., Cornwell, T.B., & Pruitt, S.W. (2002). Corporate stadium sponsorships, signaling theory, agency conflicts, and shareholder wealth. Journal of Advertising Research, 42(6), 16-33.
26. Clarysse, B. & Moray, N. (2004). A process study of entrepreneurial team formation: The case of a research-based spin-off. Journal of Business Venturing, 19, 55-79.
27. Colombo, M., Delmastro, M., & Grilli, L. (2004). Entrepreneurs' human capital and the start-up size of new technology-based firms. International Journal of Industrial Organization, 22, 1183-1211.
28. Cooper, A. & Bruno, A. (1977). Success among high technology firms. Business Horizons, 20(2), 16.
29. Cryer, J.D. & Miller, R.B. (1994). Statistics for business: Data analysis and modeling (2nd ed.). Belmont, CA: Duxbury Press.
30. Cyert, R.M. & March, J.G. (1963). A behavioral theory of the firm. Englewood Cliffs, NJ: Prentice-Hall.
31. Daily, C.M., Certo, S.T., Dalton, D.R., & Roengpitya, R. (2003). IPO underpricing: A meta-analysis and research synthesis. Entrepreneurship Theory and Practice, 27(3), 271-296.
32. Deeds, D., DeCarolis, D., & Coombs, J. (1997). The impact of firm-specific capabilities on the amount of capital raised in an initial public offering: Evidence from the biotechnology industry. Journal of Business Venturing, 12(1), 31-46.
33. Deeds, D.L., Mang, P.Y., & Frandsen, M.L. (2004). The influence of firms' and industries' legitimacy on the flow of capital into high-technology ventures. Strategic Organization, 2(1), 9-34.
34. Dess, G.G., Ireland, R.D., & Hitt, M.A. (1990). Industry effects and strategic management research. Journal of Management, 16, 7-27.
35. Downes, D. & Heinkel, R. (1982). Signaling and the valuation of unseasoned new issues. The Journal of Finance, 37(1), 1-10.
36. Eisenhardt, K. & Schoonhoven, C. (1990). Organizational growth: Linking founding team, strategy, environment, and growth among U.S. semiconductor ventures, 1978-1988. Administrative Science Quarterly, 35, 504-529.
37. Ensley, M., Carland, J.W., & Carland, J.C. (1998). The effect of entrepreneurial team skill heterogeneity and functional diversity on new venture performance. Journal of Business and Entrepreneurship, 10(1), 1-11.
38. Ensley, M.D., Pearson, A.W., & Amason, A.C. (2002). Understanding the dynamics of new venture top management teams: Cohesion, conflict, and new venture performance. Journal of Business Venturing, 17, 365-386.
39. Filatotchev, I. & Bishop, K. (2002). Board composition, share ownership, and "underpricing" of U.K. IPO firms. Strategic Management Journal, 23, 941-955.
40. Finkelstein, S. & Hambrick, D. (1990). Top-management team tenure and organizational outcomes: The moderating role of managing discretion. Administrative Science Quarterly, 35, 484-503.
41. Finkle, T.A. (1998). The relationship between boards of directors and initial public offerings in the biotechnology industry. Entrepreneurship Theory and Practice, 22(3), 5-29.
42. Fischer, H.M. & Pollock, T.G. (2004). Effects of social capital and power on surviving transformational change: The case of initial public offerings. Academy of Management Journal, 47(4), 463-481.
43. Glick, W., Miller, C., & Huber, G. (1993). The impact of upper-echelon diversity on organizational performance. In G. Huber & W. Glick (Eds.), Organizational change and re-design: Ideas and insights for improving performance (pp. 176-214). New York: Oxford University Press.
44. Gompers, P. & Lerner, J. (1999). Conflict of interest in the issuance of public securities: Evidence from venture capital. Journal of Law and Economics, 42(1), 1-28.
45. Gulati, R. & Higgins, M. (2003). Which ties matter when? The contingent effects of interorganizational partnerships on IPO success. Strategic Management Journal, 24, 127-144.
46. Gupta, A.K. (1984). Contingency linkages between strategy and general manager characteristics: A conceptual examination. Academy of Management Review, 9, 215-234.
47. Haleblian, J. & Finkelstein, S. (1993). Top management team size, CEO dominance, and firm performance: The moderating roles of environmental turbulence and discretion. Academy of Management Journal, 36(4), 844-863.
48. Hambrick, D. (1994). Top management groups: A conceptual integration and reconsideration of the "team" label. Research in Organizational Behavior, 16, 171-213.
49. Hambrick, D., Cho, T., & Chen, M. (1996). The influence of top management team heterogeneity on firms' competitive moves. Administrative Science Quarterly, 41(4), 659-684.
50. Hambrick, D. & Mason, P. (1984). Upper echelons: The organization as a reflection of its top managers. Academy of Management Journal, 9, 193-206.
51. Hambrick, D.C. & D'Aveni, R.A. (1992). Top team deterioration as part of the downward spiral of large corporate bankruptcies. Management Science, 38(10), 1445-1466.
52. Hanks, S.H. & Chandler, G. (1994). Patterns of functional specialization in emerging high tech firms. Journal of Small Business Management, 32(2), 23-36.
53. Hannon, J.M. & Milkovich, G.T. (1996). The effect of human resource reputation signals on share prices: An event study. Human Resource Management, 35, 405-424.
54. Higgins, M.C. & Gulati, R. (2003). Getting off to a good start: The effects of upper echelon affiliations on underwriter prestige. Organization Science, 14, 244-263.
55. Hitt, M.A. & Tyler, B.B. (1991). Strategic decision models: Integrating different perspectives. Strategic Management Journal, 12(5), 327-351.
56. Hoffman, J.J. & Lheureux, R.A. (1997). The effect of "inner" and "outer" TMT size on the performance of international firms. Journal of Managerial Issues, 9(1), 121-134.
57. Johnston, J. & Madura, J. (2002). The performance of Internet firms following their initial public offering. Financial Review, 37(4), 525-550.
58. Kamm, J.B. & Nurick, A.J. (1992). The stages of team venture formation: A decision-making model. Entrepreneurship Theory and Practice, 17(2), 17-27.
59. Kamm, J.B., Shuman, J.C., Seeger, J.A., & Nurick, A.J. (1990). Entrepreneurial teams in new venture creation: A research agenda. Entrepreneurship Theory and Practice, 14(4), 7-17.
60. Katz, R. (1982). The effects of group longevity on project communication and performance. Administrative Science Quarterly, 27, 81-104.
61. Kilduff, M., Angelmar, R., & Mehra, A. (2000). Top management-team diversity and firm performance: Examining the role of cognitions. Organization Science, 11(1), 21-34.
62. Kimberly, J.R. & Evanisko, M.J. (1981). Organizational innovation: The influence of individual, organizational, and contextual factors on hospital adoption of technological and administrative innovations. Academy of Management Journal, 24(4), 689-713.
63. Lange, J.E., Bygrave, W., Nishimoto, S., Roedel, J., & Stock, W. (2001). Smart money? The impact of having top venture capital investors and underwriters backing venture. Venture Capital, 3(4), 309-326.
64. Lant, T., Milliken, F., & Batra, B. (1992). The role of managerial learning and interpretation in strategic persistence and reorientation: An empirical exploration. Strategic Management Journal, 13, 585-608.
65. Lester, R.H., Certo, S.T., Dalton, C.M., Dalton, D.R., & Cannella, A.A., Jr. (2006). Initial Public Offering Investor valuations: An examination of top management team prestige and environmental uncertainty. Journal of Small Business Management, 44(1), 1-26.
66. Lin, T.H. (1996). The certification role of large block shareholders in initial public offerings: The case of venture capitalists. Quarterly Journal of Business & Economics, 35(2), 55-65.
67. Lynall, M.D., Golden, B.R., & Hillman, A.J. (2003). Board composition from adolescence to maturity: A multitheoretic view. Academy of Management Review, 28(3), 416-431.
68. Lyon, D. & Ferrier, W. (2002). Enhancing performance with product-market innovation: The influence of the top management team. Journal of Managerial Issues, 14(4), 452-469.
69. Macmillan, I., Siegel, R., & Narasimha, P.N.S. (1985). Criteria used by venture capitalists to evaluate new venture proposals. Journal of Business Venturing, 1(1), 119-128.
70. McBain, M.L. & Krause, D.S. (1989). Going public: The impact of insiders' holdings of the price of initial public offerings. Journal of Business Venturing, 4, 419-428.
71. Megginson, W.L. & Weiss, K.A. (1991). Venture capitalist certification in initial public offerings. Journal of Finance, 56, 879-903.
72. Milliken, F. & Martins, L. (1996). Searching for common threads: Understanding the multiple effects of diversity in organizational groups. Academy of Management Journal, 21, 402-423.
73. Mudambi, R. & Zimmerman Treichel, M. (2005). Cash crisis in newly public Internet-based firms: An empirical analysis. Journal of Business Venturing, 20, 543-571.
74. Murray, A. (1989). Top management group heterogeneity and HRM performance. Strategic Management Journal, 10, 125-141.
75. Nelson, T. (2003). The persistence of founder influence: Management, ownership, and performance effects at initial public offering. Strategic Management Journal, 24, 707-724.
76. Pegels, C. & Song, Y. (2000). Management heterogeneity, competitive interaction groups, and firm performance. Strategic Management Journal, 21(9), 911-924.
77. Podolny, J.M. (1994). Market uncertainty and the social character of economic exchange. Administrative Science Quarterly, 39, 458-483.
78. Pollock, T., Porac, J., & Wade, J. (2004). Constructing deal networks: Brokers as network "architects" in the U.S. IPO market and other examples. Academy of Management Review, 29(1), 50-72.
79. Pollock, T. & Rindova, V. (2003). Media legitimation effects in the market for initial public offerings. Academy of Management Journal, 46, 631-642.
80. Priem, R. (1990). Top management team group factors, consensus, and firm performance. Strategic Management Journal, 11(6), 469-478.
81. Rasheed, A. & Datta, D. (1997). Determinants of price premiums: A study of initial public offerings in the medical diagnostics and devices industry. Journal of Small Business Management, 35(4), 11-23.
82. Richard, O. & Shelor, R.M. (2002). Linking top management team age heterogeneity to firm performance: Juxtaposing two mid-range theories. International Journal of Human Resource Management, 13(6), 958-974.
83. Ritter, J.R. (1984). The "Hot Issue"market of 1980. Journal of Business, 57(2), 215-240.
84. Roure, J. & Keeley, R. (1990). Predictors of success in new technology based ventures. Journal of Business Venturing, 5(4), 201-220.
85. Roure, J. & Maidique, M. (1986). Linking prefunding factors and high-technology venture success: An exploratory study. Journal of Business Venturing, 1(3), 295-396.
86. Ryan, R. & Hise, P. (2001). Entrepreneur America: Lessons from inside Rob Ryan's high-tech start-up boot camp. New York: Harper Business, Harper-Collins Publishers.
87. Sanders, W. & Carpenter, M. (1998). Internationalization and firm governance: The roles of CEO compensation, top team composition, and board structure. Academy of Management Journal, 41(2), 158-178.
88. Sanders, W.G. & Boivie, S. (2004). Sorting things out: Valuation of new firms in uncertain markets. Strategic Management Journal, 25, 167-186.
89. Schein, E.H. (1983). The role of the founder in creating organizational culture. Organizational Dynamics, 12(1), 13-28.
90. Shane, S. & Cable, D. (2002). Network ties, reputation, and the financing of new ventures. Management Science, 48(3), 364-381.
91. Shrader, R.C., Oviatt, B.M., & McDougall, P.P. (2000). How new ventures exploit trade-offs among international risk factors: Lessons for the accelerated internationalization of the 21st century. Academy of Management Journal, 43(6), 1227-1247.
92. Siegel, R., Siegel, E., & MacMillan, I.C. (1993). Characteristics distinguishing high-growth venture. Journal of Business Venturing, 8(2), 169-180.
93. Simons, T., Pelled, L., & Smith, K. (1999). Making use of difference: Diversity, debate, and decision comprehensiveness in top management teams. Academy of Management Journal, 42(6), 662-673.
94. Smith, K.G., Smith, K.A., Olian, J., Sims, H., O'Bannon, D., & Scully, J. (1994). Top management team demography and process: The role of social integration and communication. Administrative Science Quarterly, 39, 412-438.
95. Spence, A.M. (1974). Market signaling: Informational transfer in hiring and related screening processes. Cambridge, MA: Harvard University Press.
96. Stuart, T.E., Hoang, H., & Hybels, R.C. (1999). Interorganizational endorsements and the performance of entrepreneurial ventures. Administrative Science Quarterly, 44(2), 315-349.
97. Teachman, J.D. (1980). Analysis of population diversity. Sociological Methods and Research, 1, 149-177.
98. Tihanyi, L., Ellstrand, A.E., Daily, C.M., & Dalton, D.R. (2000). Composition of the top management team and firm international diversification. Journal of Management, 26(6), 1157-1177.
99. Titman, S. & Trueman, B. (1986). Information quality and the valuation of new issues. Journal of Accounting and Economics, 8, 159-172.
100. Ucbasaran, D., Lockett, A., Wright, M., & Westhead, P. (2003). Entrepreneurial founder teams: Factors associated with member entry and exit. Entrepreneurship Theory and Practice, 28(2), 107-127.
101. Weinzimmer, L. (1997). Top management team correlates of organizational growth in a small business context: A comparative study. Journal of Small Business Management, 35(3), 1-9.
102. Welbourne, T. & Andrews, A. (1996). Predicting the performance of initial public offerings: Should human resource management be in the equation? Academy of Management Journal, 39(4), 891-919.
103. Welbourne, T. & Cyr, L.A. (1999). The human resource executive effect in Initial Public Offering Firms. Academy of Management Journal, 42(6), 616-630.
104. Wiersema, M.F. & Bantel, K.A. (1992). Top management team demography and corporate strategic change. Academy of Management Journal, 35(1), 91-121.
105. Williams, K. & O'Reilly, C. (1998). Demography and diversity in organizations: A review of 40 years of research. In L.L. Cummings & B.M. Staw (Eds.), Research in organizational behavior (pp. 77-140). Greenwich, CT: JAI Press.
106. Zimmerman, M. & Zeitz, G. (2002). Beyond survival: Achieving new venture growth by building legitimacy. Academy of Management Review, 27(3), 414-432.
107. Zimmerman, M., Zeitz, G., & Coombs, J. (2004). Legitimacy, resources and growth in new firms. Working paper. Philadelphia: Temple University.