Abstract: Our empirical study seeks to investigate how the availability of critical resources in an industry environment (i.e. environmental munificence) influences firms' decisions to restructure their business portfolios. We hypothesize that low environmental munificence impedes the tendency of firms to counter poor performance or over-diversification by portfolio refocusing, whilst fostering portfolio diversification. Additionally, we explore which aspect of environmental munificence – capacity, growth/decline or opportunity/threat from critical resources – is driving the hypothesized effect on portfolio restructuring. We will empirically test our hypotheses in a multivariate analysis using longitudinal data collected from a large sample of American and European firms. Our study seeks to contribute theoretical and empirical insights for advancing our understanding of corporate restructuring, the interdependencies between firm and industry characteristics and the environmental munificence concept.

Abstract: Corporate venture capital (CVC), defined as external equity investment made by established firms in private entrepreneurial ventures is conceptualized as a real option held by firms. This proposal links CVC investments to firm market valuation and examines the moderating role of uncertainty in this relationship. Drawing on real options theory, we develop hypotheses to argue that firms engaging in CVC investments have higher firm market valuation, but greater proportion of CVC investments to unrelated ventures has negative effect on firm market valuation. Further, this study differentiates uncertainty regarding whether uncertainty can be resolved by waiting, and argues that the positive relationship between CVC investments and market valuation is stronger when industry uncertainty is high, but weaker when firm-specific uncertainty is high.

Abstract: We explore whether and how firm-specific facets of policy risk lead firms to divest. We argue that when firms experience a dispute with a government, although the macro-level uncertainty does not vary, their assessment of their exposure to policy risk changes, making them more likely to divest in that country and, surprisingly, even beyond the boundaries of the host country. Using an originally compiled database of all the disputes presented before the World Bank and the claimants’ divesting activity in the last 18 years, we find support for this argument and no evidence that firm-specific risk spreads to other firms in the country. Our results show that policy risk is an important driver of firm’s divestitures, and identify the mechanisms through which risk can spread

Abstract: This paper explores the relationship between changes in regulatory uncertainty and changes in the sourcing of key resources for firms operating within the U.S. Electric Utilities industry in the 2000s, a period of increasing mandates for renewable inputs. We employ behavioral and evolutionary frameworks to propose that high regulatory uncertainty drives concurrent sourcing, or the simultaneous making and buying of the same input. We further hypothesize that decreases in uncertainty negate the benefits of concurrent sourcing and, thus, should drive firms away from such a strategy. Early results suggest that inertia and path dependence may inhibit movement away from concurrent sourcing. Our paper contributes by uniquely focusing on the evolution of the boundaries of the firm alongside shifts in uncertainty, a key firm boundary driver.