When entrepreneurial rhetoric meets strict regulations: Implications for the valuation of health science firms
نویسندگان
چکیده
Research Summary Health science firms have long product development horizons and need regulatory approval for market entry. In communicating with investors, they may use entrepreneurial orientation (EO) rhetoric to emphasize their strategic behavioral commitment innovation However, because EO constitutes a soft-information signal rather than evidence of substantive commitment, investors suspect firm insiders using such impression management. The solution, we argue, is sustained over time, which produces more reliable information investors—in contrast occasional increases in rhetoric, invite skeptical scrutiny. Nevertheless, investors' potential concerns regarding changes can be mitigated by concurrent hard-information signals that carry signaling costs or penalty false signaling. Managerial Entrepreneurial reduce asymmetry between managers investors. strictly regulated contexts as health industries, challenging. For embracing strategies behaviors, maintaining time critical overcoming skepticism it merely “cheap talk.” this study also suggests higher deserve valuations, given the variety benefits an firms. If aims ramp up its should aware interpret increase management confront interpretation head-on—for instance, simultaneously increasing entry corporate social responsibility.
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ژورنال
عنوان ژورنال: Strategic Entrepreneurship Journal
سال: 2021
ISSN: ['1932-443X', '1932-4391']
DOI: https://doi.org/10.1002/sej.1396