Substitutes or Complements? A Configurational Examination of Corporate Governance Mechanisms

By Vilmos F. Misangyi, Abhijith G. Acharya. 2014

725 citations recorded by the source corpus.

We conduct an exploratory qualitative comparative case analysis of the S&P 1500 firms with the aim of elaborating theory on how corporate governance mechanisms work together effectively. To do so, we integrate extant theory and research to specify the bundle of mechanisms that operate to mitigate the agency problem among publicly traded corporations and review what previous research has said about how these mechanisms combine. We then use the fuzzy-set approach to qualitative comparitive analysis (QCA) to explore the combinations of governance mechanisms that exist among the S&P 1500 firms that achieve high (and not-high) profitability. Our findings suggest that high profits result when CEO incentive alignment and monitoring mechanisms work together as complements rather than as substitutes. Furthermore, they show that high profits are obtained when both internal and external monitoring mechanisms are present. At the same time, however, monitoring mechanisms evidently combine in complex ways such that the...

Subfields: Accounting, Organizational Behavior and Human Resource Management, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/e0ebaa43c8efe6e2e71365c615e6edc7ad7c2b19

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Citations in the corpus

The Acquisitive Nature of Extraverted CEOs (2017, background): “…that may destroy corporate wealth (e.g., Jensen and Meckling, 1976), and research has focused on when conflicts of interest between managers and owners likely arise and which tools can be used to reduce them (e.g., Shleifer and Vishny, 1997; Dalton et al., 2007; Misangyi and Acharya, 2014).”
Designing Research With Qualitative Comparative Analysis (QCA): Approaches, Challenges, and Tools (2020, background): “Skewedness may contribute to the often low coverage values yielded in such studies (Misangyi and Acharya 2014; Wagemann et al. 2016).”
Complementary or Substitutive Effects? Corporate Governance Mechanisms and Corporate Social Responsibility (2018, background): “Furthermore, Misangyi and Acharya (2014) found that high profits are obtained when CEO incentive alignment and monitoring mechanisms work together as complements.”
Corporate Governance in China: A Meta‐Analysis (2018, methodology): “Future research may also integrate the role of ownership concentration and different types of ownership, which are critical characteristics of corporate governance in China, specifically by utilizing qualitative comparative techniques such as fuzzy sets (Misangyi and Acharya, 2014).”
Fuzzy Profiles (2018, methodology): “Following prior work (e.g., Campbell et al., 2016; Fiss, 2011; Greckhamer, 2016; Misangyi & Acharya, 2014), we used the direct method of calibration (see Ragin, 2008), where the researcher specifies the “fully out” and “fully in” values, as well as the so-called point of maximum ambiguity or…”
Fuzzy-set qualitative comparative analysis (fsQCA) in entrepreneurship and innovation research – the rise of a method (2017, background): “…al. (2015), Aguilera-Caracuel et al. 2014, Chang and Cheng (2014), Garcia-Castro and Aguilera (2014), Fan and Zhu (2014), Leischnig et al. (2014), Misangyi and Acharya (2014), Peltoniemi (2014), Prado and Woodside (2015), Schneider and Eggert (2014), Skarmeas et al. (2014), Wu et al. (2014),…”
Toward a Configurational Perspective on the CEO (2016, background): “In a recent configurational study, Misangyi and Acharya (2014) argue that individual corporate governance mechanisms do not work in a vacuum and must therefore be examined alongside all other corporate governance mechanisms at work.”
Board Interlocks and Firm Performance: Toward a Combined Agency–Resource Dependence Perspective (2018, background): “From an agency perspective, a number of important factors are recognized to influence agency costs and the potential for opportunism (Misangyi & Acharya, 2014; Zona, 2012).”
Too Unsafe to Monitor? How Board–CEO Cognitive Conflict and Chair Leadership Shape Outside Director Monitoring (2020, background): “The required level of director monitoring may very well differ for other corporate governance configurations (e.g., Misangyi & Acharya, 2014), or director-level monitoring may not linearly translate to board-level monitoring.”
Alignment Versus Monitoring: An Examination of the Effect of the CSR Committee and CSR-Linked Executive Compensation on CSR Performance (2021, background): “Corporate governance incorporates a bundle of mechanisms to mitigate agency problems (Misangyi & Acharya, 2014).”