Capital Market Scrutiny and Strategic Distinctiveness of the Firm: Evidence from a Natural Experiment

Jingoo Kang, Yungu Kang

    Research output: Contribution to journalArticlepeer-review

    Abstract

    Several streams of strategy literature emphasize firms’ distinctive strategy as being key to sustainable competitive advantage. Using a unique natural experiment setting, we examine how increased scrutiny and pressure from short-sellers affect the strategic distinctiveness of the firm. We find that increasing short-selling pressure reduces the strategic distinctiveness of the firm and that this negative effect is more pronounced for more visible and underperforming firms. Our findings suggest that removing restrictions on short-selling can have an unintended side-effect of reducing the strategic distinctiveness of firms.

    Original languageEnglish (US)
    Pages (from-to)461-476
    Number of pages16
    JournalBritish Journal of Management
    Volume36
    Issue number1
    DOIs
    StatePublished - Jan 2025

    ASJC Scopus subject areas

    • General Business, Management and Accounting
    • Strategy and Management
    • Management of Technology and Innovation

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