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CEO Regulatory Foci, Environmental Dynamism, and Small Firm Performance

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  • J. Craig Wallace
  • Laura M. Little
  • Aaron D. Hill
  • Jason W. Ridge

Abstract

This research proposes and tests that regulatory foci of small business chief executive officers (promotion focus and prevention focus) relate to firm performance differentially when levels of environmental uncertainty vary. Results suggest that a promotion focus is positively related to firm performance, whereas a prevention focus is negatively related to firm performance. Further, these relationships are moderated by the degree of environmental dynamism such that in more dynamic environments, the relationship between promotion focus and firm performance is strengthened, whereas the relationship between prevention focus and firm performance is negatively affected. The reverse was found for less dynamic environments. Theoretical and practical implications as well as future research avenues are offered.

Suggested Citation

  • J. Craig Wallace & Laura M. Little & Aaron D. Hill & Jason W. Ridge, 2010. "CEO Regulatory Foci, Environmental Dynamism, and Small Firm Performance," Journal of Small Business Management, Taylor & Francis Journals, vol. 48(4), pages 580-604, October.
    • Handle: RePEc:taf:ujbmxx:v:48:y:2010:i:4:p:580-604
    DOI: 10.1111/j.1540-627X.2010.00309.x
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    Cited by:

    1. Biru, Ashenafi & Filatotchev, Igor & Bruton, Garry & Gilbert, David, 2023. "CEOs’ regulatory focus and firm internationalization: The moderating effects of CEO overconfidence, narcissism and career horizon," International Business Review, Elsevier, vol. 32(3).
    2. Andres Felipe Cortes & Andreea N. Kiss, 2023. "Is managerial discretion high in small firms? A theoretical framework," Small Business Economics, Springer, vol. 60(1), pages 157-172, January.

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