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Signal strength, media attention, and resource mobilization : evidence from new private equity firms

(2020) ACADEMY OF MANAGEMENT JOURNAL. 63(4). p.1082-1105
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Abstract
Past research has shown that new firms can facilitate resource mobilization by signaling their unobservable quality to prospective resource providers. However, we know less about situations in which firms convey multiple signals of different strengths-that is, signals that are more- or less-correlated with unobservable firm quality. Building on a sociocognitive perspective, we propose that prospective resource providers respond differently to signals of different strengths and that the effectiveness of signals, especially weak signals, will be contingent on the media attention new firms receive. Empirically, we conduct a longitudinal analysis examining the ability of new private equity firms to raise a follow-on fund. Consistent with our theory, we find that unrealized performance, a relatively weak signal, positively influences fundraising. However, we fail to find statistical evidence that its effect is weaker than that of realized performance, a relatively strong signal. Further, media attention strengthens the relationship between unrealized performance and fundraising, but media attention exerts less impact on the relationship between realized performance and fundraising. Taken together, our findings deepen our understanding of how new firms can mobilize resources with signals of different strengths and of how the media-as a key information intermediary- differently impacts their effectiveness.
Keywords
Management of Technology and Innovation, Strategy and Management, General Business, Management and Accounting, Business and International Management, MARKET, REPUTATION, MANAGEMENT, PERFORMANCE, ALLIANCE, INFORMATION, ENTREPRENEURSHIP, ORGANIZATIONS, EQUILIBRIUM, PERSPECTIVE

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MLA
Vanacker, Tom, et al. “Signal Strength, Media Attention, and Resource Mobilization : Evidence from New Private Equity Firms.” ACADEMY OF MANAGEMENT JOURNAL, vol. 63, no. 4, 2020, pp. 1082–105, doi:10.5465/amj.2018.0356.
APA
Vanacker, T., Forbes, D., Knockaert, M., & Manigart, S. (2020). Signal strength, media attention, and resource mobilization : evidence from new private equity firms. ACADEMY OF MANAGEMENT JOURNAL, 63(4), 1082–1105. https://doi.org/10.5465/amj.2018.0356
Chicago author-date
Vanacker, Tom, Daniel Forbes, Mirjam Knockaert, and Sophie Manigart. 2020. “Signal Strength, Media Attention, and Resource Mobilization : Evidence from New Private Equity Firms.” ACADEMY OF MANAGEMENT JOURNAL 63 (4): 1082–1105. https://doi.org/10.5465/amj.2018.0356.
Chicago author-date (all authors)
Vanacker, Tom, Daniel Forbes, Mirjam Knockaert, and Sophie Manigart. 2020. “Signal Strength, Media Attention, and Resource Mobilization : Evidence from New Private Equity Firms.” ACADEMY OF MANAGEMENT JOURNAL 63 (4): 1082–1105. doi:10.5465/amj.2018.0356.
Vancouver
1.
Vanacker T, Forbes D, Knockaert M, Manigart S. Signal strength, media attention, and resource mobilization : evidence from new private equity firms. ACADEMY OF MANAGEMENT JOURNAL. 2020;63(4):1082–105.
IEEE
[1]
T. Vanacker, D. Forbes, M. Knockaert, and S. Manigart, “Signal strength, media attention, and resource mobilization : evidence from new private equity firms,” ACADEMY OF MANAGEMENT JOURNAL, vol. 63, no. 4, pp. 1082–1105, 2020.
@article{8625293,
  abstract     = {{Past research has shown that new firms can facilitate resource mobilization by signaling their unobservable quality to prospective resource providers. However, we know less about situations in which firms convey multiple signals of different strengths-that is, signals that are more- or less-correlated with unobservable firm quality. Building on a sociocognitive perspective, we propose that prospective resource providers respond differently to signals of different strengths and that the effectiveness of signals, especially weak signals, will be contingent on the media attention new firms receive. Empirically, we conduct a longitudinal analysis examining the ability of new private equity firms to raise a follow-on fund. Consistent with our theory, we find that unrealized performance, a relatively weak signal, positively influences fundraising. However, we fail to find statistical evidence that its effect is weaker than that of realized performance, a relatively strong signal. Further, media attention strengthens the relationship between unrealized performance and fundraising, but media attention exerts less impact on the relationship between realized performance and fundraising. Taken together, our findings deepen our understanding of how new firms can mobilize resources with signals of different strengths and of how the media-as a key information intermediary- differently impacts their effectiveness.}},
  author       = {{Vanacker, Tom and Forbes, Daniel and Knockaert, Mirjam and Manigart, Sophie}},
  issn         = {{0001-4273}},
  journal      = {{ACADEMY OF MANAGEMENT JOURNAL}},
  keywords     = {{Management of Technology and Innovation,Strategy and Management,General Business,Management and Accounting,Business and International Management,MARKET,REPUTATION,MANAGEMENT,PERFORMANCE,ALLIANCE,INFORMATION,ENTREPRENEURSHIP,ORGANIZATIONS,EQUILIBRIUM,PERSPECTIVE}},
  language     = {{eng}},
  number       = {{4}},
  pages        = {{1082--1105}},
  title        = {{Signal strength, media attention, and resource mobilization : evidence from new private equity firms}},
  url          = {{http://dx.doi.org/10.5465/amj.2018.0356}},
  volume       = {{63}},
  year         = {{2020}},
}

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