What is it about?
Applications of signaling theory to predict reorganization outcomes are in their infancy. The dynamic integrative framework developed in this study is useful in identifying different types of signals and predicting outcomes of firms in crisis. The results of this study can be us for various decision makers to predict the turnaround potential of bankrupt firms. Our res show that an increase in alliance partners, institutional investors, and securities analyist following a bankrupt firm predicts the firm’s reorganization outcome. Moreover, firms that able to gain positive attention from key stakeholders will also gain positive interpretation their strategic efforts. Signals from alliance partners and institutional investors amplify signaling effect of a firm’s de-diversification effort in predicting its reorganization outcome.
Featured Image
Why is it important?
Investors need to know which firms are likely to emerge from bankruptcy.
Perspectives
Most who write about emergence from bankruptcy believe that it can be attributed to the organizations efforts to reorganize and turn themselves around. We find that this is a limited perspective. Support from externasl stakeholders is key.
Kimberly Boal
Texas Tech University System
Read the Original
This page is a summary of: Resolving a dilemma of signaling bankrupt-firm emergence: A dynamic integrative view, Strategic Management Journal, August 2015, Wiley,
DOI: 10.1002/smj.2406.
You can read the full text:
Contributors
The following have contributed to this page
