Loading...
Signal strength, media attention and new firm resource mobilization: Evidence from new private equity firms
Vanacker, Tom Forbes, Daniel Knockaert, Mirjam Manigart, Sophie
Vanacker, Tom
Forbes, Daniel
Knockaert, Mirjam
Manigart, Sophie
Citations
Altmetric:
Publication Type
Journal article with impact factor
Editor
Supervisor
Publication Year
2020
Journal
Academy of Management Journal
Book
Publication Volume
63
Publication Issue
4
Publication Begin page
1082
Publication End page
1105
Publication Number of pages
Collections
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—i.e., 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 (PE) firms to raise a follow-on fund. Consistent with our theory, we find that unrealized performance, a relatively weak signal, positively influences fundraising. But 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.
Research Projects
Organizational Units
Journal Issue
Keywords
Resource Mobilization, New Private Equity Firms