Diffusion patterns in small vs. large capital markets-the case of value-based management

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Authors

We empirically study the diffusion of value-based management (VBM) in small capital markets. Specifically, we analyse the factors that influence VBM adoption in Danish-listed firms. Based on a hand-collected data set covering 665 firm years from 2002 to 2010, we find that the same factors influence the diffusion of VBM in both large and small capital markets. Specifically, we find that large firms with a higher percentage of institutional ownership and with a CEO whose education is business-related are more likely to adopt VBM. Additionally, the control variables reveal a significant positive correlation between VBM adoption and leverage, capital intensity, liquidity, and the characteristics of top executives. Furthermore, we find that manufacturing and utility firms are more likely to adopt VBM than service or trade firms. Contrary to the mainstream opinion, we contribute to the literature that findings from large capital markets appear to be transferable to firms in small capital markets.

Original languageEnglish
JournalManagement Revue
Volume34
Issue number1
Pages (from-to)1-29
Number of pages29
ISSN0935-9915
DOIs
Publication statusPublished - 01.01.2023

Bibliographical note

Publisher Copyright:
© (2023), (Nomos Verlagsgesellschaft mbH und Co KG). All Rights Reserved.

    Research areas

  • Management studies - capital markets, Denmark, diffusion theory, ownership, risk, shareholder value, upper echelons, value-based management

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