A Rose by Any Other Name? Top Managers’ Given Name Commonality and Firm Growth Preferences

Speaker: Tao Chen
Speaker Intro:  Assistant Professor, College of Business (Nanyang Business School), Nanyang Technological University

Prof. Tao Chen's Profile

Host: Jiaquan Yao
Description:  This paper examines the relationship between top managers’ given-name commonality and firm growth preferences. External growth through acquisitions and internal growth through research and development (R&D) investments offer two channels for firms to achieve growth goals. Psychology research has shown that individuals with common given names may have developed high core self-evaluations. As top managers with strong self-evaluation are more prone to engage in quantum, large-stake investments (i.e., acquisitions) and less prone to allocate attention and firm resources to incremental investments (i.e., R&D investments), firms with a high percentage of top managers with common given names will exhibit a stronger preference for acquisitions over R&D investments in pursuing firm growth. Using a sample of S&P 1500 firms, we find supporting evidence that firms managed by a high percentage of top managers with common given names are positively associated with the number of acquisitions and the transaction value of acquisitions, but are negatively associated with R&D intensity. Our findings are robust to various robustness checks and endogeneity concerns.
Time: 2016-06-03(Friday)16:40-18:00
Venue: N303, Econ Building
Organizer: WISE & SOE