The moderating role of environment on the relationship between corporate governance and corporate entrepreneurship

Mark A. Tribbitt

doi:10.17918/etd-4078

There has been substantial research that has examined both corporate entrepreneurship and corporate governance. While the antecedents and outcomes of these constructs have been extensively examined, the relationship between the two has only recently seen focus within the literature. Existing research relating corporate governance and corporate entrepreneurship has focused on how corporate governance mechanisms influence the development of corporate entrepreneurship. While this research has begun to develop into a separate stream of research, existing empirical research has by and large been cross-sectional thus the dynamic relationships between the two constructs have been spurious. Additionally, research in this area while extremely important is somewhat incomplete. Specifically, current analyses have not taken into account the impact of exogenous factors on the relationship between corporate governance and corporate entrepreneurship. This study aims to build on the current literature by addressing each of the aforementioned gaps in the literature. First, utilizing longitudinal analytical techniques this study attempts to improve our understanding of the dynamic relationship between corporate governance and corporate entrepreneurship. Next, the study expands on the existing models by injecting the moderating impact of exogenous variables to the corporate governance - corporate entrepreneurship relationship. The exogenous variables represent the influence of characteristics of the external environment and include: the market for corporate control and the competitive environment. This study, like others within this stream of research, will examine multiple corporate governance mechanisms and their relationship to corporate entrepreneurship. These governance mechanisms are the structure of the board of directors, executive ownership, and institutional ownership, both short and long-term based on the investment horizons of these owners. Unlike other studies within this research stream, the outcome variable, corporate entrepreneurship will be measured utilizing several archival measures. These include: R&D expenditure, patent counts and innovation as measured by new product introductions. This method of measuring corporate entrepreneurship is important because much of the existing research involving corporate entrepreneurship has utilized manager perceptions to measure the construct. Utilizing agency theory as the theoretical lens for this study I suggest that the market for corporate control, as measured by the level of antitakeover provisions, will moderate the relationships between the structure of the board and corporate entrepreneurship and executive ownership and corporate entrepreneurship. Additionally, I suggest that different characteristics of the competitive environment will moderate the relationship between short and long-term institutional ownership and corporate entrepreneurship. This study addresses several gaps in the literature by injecting the moderating influence of characteristics of the external environment into the relationship between corporate governance and corporate entrepreneurship. From a methodological perspective this study improves our understanding of the aforementioned relationships by utilizing a longitudinal analytical approach. Further this work moves away from managerial perception in measuring corporate entrepreneurship and toward archival measures of the construct.

The moderating role of environment on the relationship between corporate governance and corporate entrepreneurship

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The moderating role of environment on the relationship between corporate governance and corporate entrepreneurship

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