IDEAS home Printed from https://ideas.repec.org/a/bla/stratm/v34y2013i7p800-822.html
   My bibliography  Save this article

Group polarization on corporate boards: Theory and evidence on board decisions about acquisition premiums

Author

Listed:
  • David H. Zhu

Abstract

This study investigates how a fundamental group decision‐making bias referred to as group polarization can influence boards' acquisition premium decisions. The theory suggests that when prior premium experience would lead directors on average to support a relatively high premium prior to board discussions, they will support a focal premium that is even higher after discussions; but when directors' prior premium experience would lead them on average to support a relatively low premium prior to board discussions, they will support a focal premium that is even lower after discussions. Results provided strong support for the theory. Moreover, group polarization was reduced by demographic homogeneity among directors and by minority expertise but increased by board influence. This study introduces a fundamental group decision‐making bias into governance research and explains how group processes can influence network diffusions. Copyright © 2012 John Wiley & Sons, Ltd.

Suggested Citation

  • David H. Zhu, 2013. "Group polarization on corporate boards: Theory and evidence on board decisions about acquisition premiums," Strategic Management Journal, Wiley Blackwell, vol. 34(7), pages 800-822, July.
    • Handle: RePEc:bla:stratm:v:34:y:2013:i:7:p:800-822
    DOI: 10.1002/smj.2039
    as

    Download full text from publisher

    File URL: https://doi.org/10.1002/smj.2039
    Download Restriction: no
    File URL: https://libkey.io/10.1002/smj.2039?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:stratm:v:34:y:2013:i:7:p:800-822. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://onlinelibrary.wiley.com/journal/10.1111/0143-2095 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.