General Management Department's Lecture

Theme：Peer Firms’ Delisting and the Spillover of Legitimacy Loss

Speaker：Dr. Yinuo TANG (University of Hong Kong)

Time：2019-11-21 12:00

Address：Room 706, Mingde Business Building

Language：English/Chinese

Abstract：

Recent works have documented how one firm’s legitimacy loss may spread to other firms through similarity-based spillovers. We complement this line of research by proposing and verifying the coexistence of contagion and substitution effects. From the social judgment lens, we propose that stakeholders adopting category-based judgments tend to identify a similarity-based contagion effect; that is, peer firms’ legitimacy loss can spread to a focal firm because of categorical association. In contrast, stakeholders adopting feature-based judgments tend to discover a similarity-based substitution effect; that is, peer firms’ legitimacy loss can lead the focal firm to enjoy a relative advantage. Using foreign firms’ delistings from the U.S. stock market as a natural laboratory, we find that a foreign firm’s delisting negatively affects media perceptions and investor valuations of stay-listed foreign firms from the same country (the contagion effect), but positively affects investors’ valuations of stay-listed foreign firms with shared analyst coverage (the substitution effect). Finally, we discuss how two host-country conditions—anti-globalization atmospheres and stock market volatility—serve as important moderators in the process by affecting stakeholders’ attention to foreign delisting events.

Short biography：

Dr. Yinuo Tang is an Assistant Professor in Strategy and International Business in the Faculty of Business and Economics, The University of Hong Kong (HKU). He received his B.S. from Tsinghua University in China, M.P.A. from Cornell University, and Ph.D. from Katz Graduate School of Business at the University of Pittsburgh. Prior to joining HKU in 2015, he taught at the University of Pittsburgh from 2013 to 2015.

His research aims to understand how firms advance their capability and performance in heterogeneous institutional environments via corporate strategies such as M&A. In particular, he explores the relationship between Emerging Market Firms’ institutional strategies and their competitive advantages in the integrated global market. His work has been published at Journal of Corporate Finance and Academy of Management Best Paper Proceedings. He is a board member of Journal of Management Studies.