Organization and Strategy Seminar（2016-14）

Topic:Crystallizing status: Corporate divestiture as a strategic reaction to status inconsistency

Speaker:Pengfei Wang, Erasmus University Rotterdam

Time: Thursday, 3 November, 14:45-16:45 pm

Location: Room 111, Guanghua Building 2

Abstract:

This study focuses on the market identities of firms and suggests that identity ambiguity is caused not only by bridging horizontal product categories but also by status inconsistency stemming from bridging vertical status categories. Focusing specifically on how firms reduce status inconsistency by restructuring their business portfolios, we argue that high-status firms are most likely to divest business units to reduce status inconsistency and that low-status, unrelated, and small business units are most likely to be divested. Using a comprehensive sample of firms traded publicly in the U.S. from 1998 to 2014, we report that status inconsistency indeed increases the likelihood of divestiture for high-status firms. When high-status firms experience a high degree of status inconsistency, they are more likely to divest low-status business units and business units that are peripheral in terms of size and business relatedness.

Introduction:

Pengfei Wang is currently working as a post-doctor researcher at Rotterdam School of Management, Erasmus University, with the support of NOW VIDI grant. He obtained his PhD in Strategic Management from Erasmus University in 2016. As part of his PhD trajectory, he also spent three months as a visiting scholar at the Department of Strategy at the Ross School of Business, University of Michigan, Ann Arbor. His research interests center around status, networks, innovation and entrepreneurship. Several of his studies are invited for revise-and-resubmit at top-tier journals, and one of his single-authored papers is already accepted for publication byJournal of International Management.

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