Premium
Industry Implications of Value Creation and Appropriation Investment Decisions *
Author(s) -
King David R.,
Slotegraaf Rebecca J.
Publication year - 2011
Publication title -
decision sciences
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.238
H-Index - 108
eISSN - 1540-5915
pISSN - 0011-7315
DOI - 10.1111/j.1540-5915.2011.00321.x
Subject(s) - appropriation , volatility (finance) , business , profitability index , industrial organization , profit (economics) , investment decisions , investment (military) , marketing , economics , microeconomics , finance , philosophy , linguistics , behavioral economics , politics , political science , law
Managers face a critical task in making firm investment decisions that are targeted toward creating and appropriating value. As managers weigh their resource investment decisions, we argue that these investments have a direct impact on the growth and volatility of the firm's industry. With data covering 377 industries across 16 years, we investigate relationships for aggregate firm investments on the growth and volatility of industry profit and sales. Results reveal important, complex relationships between investment in value creation and appropriation and different elements of the industry environment. Implications for management theory and practice are discussed.