Hudson, Kerry and Morgan, Robert ![]() |
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Abstract
We know little of why a minority of firms pursue counter-cyclical strategies and consequently outperform competitors during recessions. Based on the theory of institutional isomorphism, we hypothesize that these firms avoid the mimetic and normative pressures that promote strategic convergence during uncertainty. We demonstrate these effects at the board-level in a sample of 1,615 U.S. firms. Mimetic processes are evident, with firms’ connectedness in board interlock networks attenuating profitability and decreasing firm value during recessions—a reversal of the positive effects during expansions. Normative pressures arise from homogeneity in directors’ educational and professional experience, with greater consequences for long-term performance. Overall, recessionary performance is improved when firms occupy relatively isolated positions in informational networks and appoint directors from a range of backgrounds.
Item Type: | Article |
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Date Type: | Publication |
Status: | Published |
Schools: | Business (Including Economics) |
Subjects: | H Social Sciences > HD Industries. Land use. Labor > HD28 Management. Industrial Management |
Publisher: | Elsevier |
ISSN: | 0024-6301 |
Date of First Compliant Deposit: | 5 January 2022 |
Date of Acceptance: | 19 December 2021 |
Last Modified: | 13 Nov 2024 03:30 |
URI: | https://orca.cardiff.ac.uk/id/eprint/146327 |
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