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The triggers of local and distant search: Relative magnitude and persistence in explaining acquisition relatedness
Rutgers University, School of Business, Camden, NJ, USA.
Jönköping University, Jönköping International Business School, JIBS, Business Administration. Jönköping University, Jönköping International Business School, JIBS, Center for Family Enterprise and Ownership (CeFEO).ORCID iD: 0000-0002-7499-9289
Jönköping University, Jönköping International Business School, JIBS, Business Administration. Jönköping University, Jönköping International Business School, JIBS, Center for Family Enterprise and Ownership (CeFEO). Tecnológico de Monterrey, EGADE Business School, Mexico.ORCID iD: 0000-0002-3742-542X
Management and Operations, Villanova University, Villanova, PA, USA.
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2018 (English)In: Long range planning, ISSN 0024-6301, E-ISSN 1873-1872Article in journal (Refereed) Epub ahead of print
Abstract [en]

Research on problemistic search has assumed negative attainment discrepancy to be the trigger of both local and distant search. Extending this research, we present and compare two additional triggers: (1) relative attainment discrepancy, which reflects how much a firm's attainment discrepancy deviates from its past negative attainment discrepancies; and (2) persistent attainment discrepancy, which reflects how often the firm experiences below-aspirations performance. Our triggers for distant search model a behavioral explanation for the timing and relatedness of acquisitions. We find support for baseline arguments of problemistic search whereby firms increase both industry- and skill-related acquisitions when they perform below aspirations. When they persistently perform below aspirations, however, this likelihood is reduced and firms engage in acquisitions that are more unrelated, thereby providing support for the notion of expanding search boundaries from local to distant search. Of the two triggers of distant search proposed, relative attainment discrepancy does not induce firms to expand search boundaries. Our results indicate that persistent attainment discrepancy is a key construct to consider when studying the expansion of search boundaries.

Place, publisher, year, edition, pages
Elsevier, 2018.
Keywords [en]
Behavioral theory of the firm, Local and distant search, Performance feedback, Related and unrelated acquisitions, Enterprise resource planning, Finance, Behavioral theory of the firms, Search models, Mergers and acquisitions
National Category
Business Administration
Identifiers
URN: urn:nbn:se:hj:diva-39335DOI: 10.1016/j.lrp.2018.03.001ISI: XYZScopus ID: 2-s2.0-85045191906Local ID: IHHCeFEOISOAI: oai:DiVA.org:hj-39335DiVA, id: diva2:1202895
Available from: 2018-05-02 Created: 2018-05-02 Last updated: 2018-05-02

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Baù, MassimoChirico, Francesco

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