Linguistic Framing of Information Disclosure and Analysts’ Evaluation of Innovation Strategy
Linguistic Framing of Information Disclosure and Analysts’ Evaluation of Innovation Strategy
안신혜(서울대학교); 조승아(서울대학교)
33권 2호, 1~26쪽
초록
Scholars have been increasingly interested in the dynamics between technology firms’ innovation strategies and financial markets’ responses. However, existing research has offered mixed predictions on how financial analysts react to firms’ technological search diversity. On the one hand, firms’ technological search diversity forms the foundation of economies of scope and synergy among different search domains, leading to financial analysts’ greater earnings predictions. On the other hand, a countervailing mechanism also exists through which technological search diversity increases operational inefficiency and negative external perception toward incoherent research identity, lowering analysts’ earnings prediction. Combining the two competing mechanisms, our study attempts to resolve this puzzle and suggests an inverted U-shaped relationship between technological search diversity and financial analysts’ earnings prediction. Going further, we also predict that such a curvilinear relationship between firms’ technological search diversity and analysts’ earnings prediction is moderated by the firms’ linguistic framing strategies as sense-giving attempts, with specialist identity framing amplifying and generalist identity framing attenuating the relationship. We find evidence largely supporting the predictions by analyzing 18-year panel data of biopharmaceutical firms with leading innovation performance. These findings provide rich implications for the literature on technology firms’ innovation strategies and financial analysts’ evaluations, as well as for corporate decision-makers managing their relationships with financial market stakeholders.
Abstract
Scholars have been increasingly interested in the dynamics between technology firms’ innovation strategies and financial markets’ responses. However, existing research has offered mixed predictions on how financial analysts react to firms’ technological search diversity. On the one hand, firms’ technological search diversity forms the foundation of economies of scope and synergy among different search domains, leading to financial analysts’ greater earnings predictions. On the other hand, a countervailing mechanism also exists through which technological search diversity increases operational inefficiency and negative external perception toward incoherent research identity, lowering analysts’ earnings prediction. Combining the two competing mechanisms, our study attempts to resolve this puzzle and suggests an inverted U-shaped relationship between technological search diversity and financial analysts’ earnings prediction. Going further, we also predict that such a curvilinear relationship between firms’ technological search diversity and analysts’ earnings prediction is moderated by the firms’ linguistic framing strategies as sense-giving attempts, with specialist identity framing amplifying and generalist identity framing attenuating the relationship. We find evidence largely supporting the predictions by analyzing 18-year panel data of biopharmaceutical firms with leading innovation performance. These findings provide rich implications for the literature on technology firms’ innovation strategies and financial analysts’ evaluations, as well as for corporate decision-makers managing their relationships with financial market stakeholders.
- 발행기관:
- 한국인사조직학회
- 분류:
- 경영학