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This paper examines the use of signaling theory in the M&A context. We review some of the most important developments in applications and extensions of this theory to the realm of M&A, indicating how this theory has been used to explain many M&A decisions and outcomes and has offered fresh perspectives in the mature literature on acquisitions. For example, we show how signaling theory provides a new view of the determinants of acquisition premiums, and it can contribute to an improved understanding of firms’ search for acquisition opportunities as well as target selection. We also provide a critique of existing research to identify gaps in understanding on the roles played by signals. For instance, we discuss how signals can create contracting problems during M&A negotiations, how the value of signals might vary across deals, and how bidder heterogeneity and bidders’ own signals matter for certain transactions. Finally, in addition to taking stock of this stream of research, we identify some of the most important areas that deserve research attention. Signaling theory can contribute to an improved understanding of acquisition performance outcomes, and signals need to be investigated along with other solutions to enhance M&A deal making and execution. We identify new research methods that would help to advance signaling theory in the acquisitions literature.

Shane and Venkataraman (2000) suggest “the field [of entrepreneurship] involves the study of sources of opportunities; the processes of discovery, evaluation, and exploitation of opportunities; and the set of individuals who discover, evaluate, and exploit them” (p. 218). However, the study of the judgment required for opportunity evaluation has been greatly overshadowed by interest in opportunity recognition and to a lesser extent opportunity exploitation. This is surprising considering the number of economic theories of the entrepreneur that recognize sound judgment as a principal quality of entrepreneurship (Cantillon, 1755; Kirzner, 1973; Knight, 1921; Mises, 1949; Say, 1840; Schumpeter, 1934; Shackle, 1955). In fact, the first recognized theory of the entrepreneur defined the entrepreneur as someone who exercises business judgment in the face of uncertainty (Cantillon, 1755/1931, pp. 47–49). Similarly, Knight (1921, p. 271) suggests that the essence of entrepreneurship is judgment, born of uncertainty, and argues that it is this judgment that delineates the function of entrepreneur from that of manager. He goes on to point out that the function of manager does not in itself imply entrepreneurship but that a manager becomes an entrepreneur when he exercises judgment involving liability to error (Knight, 1921, p. 97). However, the judgment referred to by these theorists is not just any form of judgment, it is judgment exercised in the decision of whether to take action.

When a firm implements certain HR practices, different employees attribute different motives and intentions to the firm with regard to those HR practices. Research on HR attributions has made progress toward understanding the relationship between HR practices and employee outcomes from a process perspective. However, this research is still fragmented and lacks a systematic typology of the different types of HR attributions and a compelling organizing research framework. Furthermore, a number of research gaps and opportunities have emerged regarding the nomological net of employee HR attributions. To address the gaps and capitalize on the opportunities, the authors propose an overarching theory-driven multi-level framework that guides the choice of the antecedents and outcomes of employee HR attributions and explains their relationships along with both mediating and moderating mechanisms. Drawing on signaling theory embedded in the proposed framework, the authors identify and categorize various antecedents of employee HR attributions to explain their relationships. The authors also use several additional theories such as social exchange and the job demands–resources model included in their review to identify and categorize various outcomes of employee HR attributions across levels of analysis (i.e., individual, collective [team/group/unit], organization) and explain their relationships. In addition, the proposed framework explains how individual-level employee HR attributions emerge at the collective level and influence collective processes and outcomes. The authors end their review by pinpointing future research needs and discussing related future research directions.

In the rapidly changing and globalizing environment, mergers and acquisitions (M&As) have become increasingly important. In this study, we paid specific attention to the voluntary announcements of M&A budgets by Japanese firms. We discussed the antecedents and consequences of such announcements by incorporating the context of Japan, which has experienced an enduring economic downturn since 1990 and is in the process of adopting a Western style of governance. Drawing on signaling theory and impression management theory, this exploratory study intended to contribute to the literature by incorporating the influence of the social context and by arguing for the possibility that announcements of M&A budgets may be used not only for strategic purposes but also for impression management and to reduce information asymmetry.

The chapter explores how different theoretical traditions address the gaps between talk (symbolic communication practices) and actions (substantive performance) in organisations. The chapter details the main theoretical approaches in greenwashing research, namely legitimacy theory, attribution theory, institutional theory, signaling theory, impression management approaches and constructivist approaches. Among these latter, Communicative Constitution of Organizations (CCO) challenges the dominant view in literature and suggests abandoning the traditional dichotomy of talk versus action. The different approaches to studying greenwashing are presented along with main questions and research methods used in each field and sub-field of study. For each theoretical approach the main research trends and novel research questions are proposed. Researchers, doctoral and post-graduate students may appreciate this as standalone contribution to guide their future studies in this area, by designing their research avenues based on the best practices in the field.

The study of entrepreneurship in the twentieth century can be characterized as the import era: psychological trait theories (Brockhaus & Horowitz, 1986; McClelland, 1965; Powell & Bimmerle, 1980); psychological cognition theories (Busenitz, 1999; Katz, 1992); strategy theories (McDougall & Robinson, 1990; Sandberg, 1992); finance theories (Brophy & Shulman, 1992; McMahon & Stanger, 1995); marketing theories (Hills, 1981); population ecology theories (Aldrich, 1990); sociological network theories (Aldrich & Zimmer, 1986; Birley, 1985) and creativity theories (Long & McMullen, 1984) among others were imported to shape the development of entrepreneurship as an academic discipline. Thus far, the results of this prodigious effort are ambiguous at best; findings warrant continued effort in each stream but have to produce consequential insights into the nature, process, and dynamics of entrepreneurship. Why this may be so will be considered later. However, such a track record should prompt considerable reluctance to heed McMullen and Shepherd’s (2003) suggestion to import yet another theory – signal detection – rather than approach the study of entrepreneurship directly. Based on their exposition, such reluctance would be well founded except for the rather exciting fact that the framework has the potential for consequential insights if applied in another way. The purpose of this commentary is to critically evaluate the authors’ conceptualization and outline the alternative.

The present study aims to identify the determinants of the capital structure of restaurants firms in Portugal, as well as to analyze the application of capital structure theories in those companies.

In order to reach the objectives, a sample of 400 companies belonging to the restaurant sector was used. The analysis was carried out between 2008 and 2017, and multiple linear regression, based on panel data, was applied.

The obtained results allowed to verify that the considered variables have different effects on the capital structure of the companies under study and that the restaurant sector partially applies the trade-off, pecking order and signaling theories.

Scholarship on reputation in and of organizations has been going on for decades, and it always has separated along level of analysis issues, whereby the separate literatures on individual, group/team/unit, and organization reputation fail to acknowledge each other. This sends the implicit message that reputation is a fundamentally different phenomenon at the three different levels of analysis. We tested the validity of this implicit assumption by conducting a multilevel review of the reputation literature, and drawing conclusions about the “level-specific” or “level-generic” nature of the reputation construct. The review results permitted the conclusion that reputation phenomena are essentially the same at all levels of analysis. Based on this, we frame a future agenda for theory and research on reputation.

This paper explores dividend announcements based on information hypothesis. We explore in particular whether or not information signaling theory existed in Taiwan. We also explore the free cash flow hypothesis. In order to eliminate affecting factors, we target companies with irregular dividends as research samples, just like those with specially designated dividends (SDD). We examine whether or not those proceeds may be deemed as future earnings prospection. In this paper we study mainly dividend announcements made during stockholder’s meetings of the companies listed in the Taiwan Stock Exchange (TSE) or R.O.C. Over-the-Counter Securities Exchange (ROSE). We apply event study as means of analyzing abnormal returns of the companies. In addition we use the GARCH model with traditional ordinary least square to estimate the market model. The results indicate that SDDs are considered positive signals by the national exchange, TSE. In addition, we also show that the first-time SDD does transmit a positive signal to the market regarding the firm’s future cash flow, and that the SDD of no payment in the previous three years is negative. Furthermore, we prove that low Q firms have greater market reaction than high Q firms in announcement period. The free cash flow hypothesis and firm size effects could not be verified in Taiwan.

The M&A literature lacks coherence and consistency when explaining the role of CEO power in influencing post-acquisition firm performance in both theoretical and empirical terms. This study uses meta-analytic techniques to quantitatively synthesize and evaluate the impact of 11 CEO power constructs (CEO duality; compensation; ownership; founder CEO; acquisition experience; functional area experience; outside directorship; elite education; CEO celebrity; age; and tenure) on acquiring firms’ post-acquisition performance. Results of 85 independent studies show that CEO ownership, functional area experience, and tenure are significantly positive predictors for better acquisition performance. At the same time, CEO duality and CEO elite education are significantly negative predictors of different measures of acquisition performance. These findings indicate the importance of integrating different theories to enhance our understanding of the nature of strategic leadership in acquisition performance.