The purpose of this paper is to investigate the effects of a firm’s entrepreneurial proclivity on market performance for large, publicly traded US firms. This study draws upon the five-dimensional view of corporate entrepreneurship (CE) and develops hypotheses aimed at understanding the effects of direct effect of CE cues of proactiveness, autonomy, innovativeness, competitive aggressiveness and risk-taking on stock performance during earnings conference calls.
The entrepreneurial orientation of 339 firm post-earnings announcement conference calls is analyzed through a content analysis of transcripts, and the impact of CE cues on stock price is measured using event-study methodology.
The results suggest that the cueing the CE dimensions of innovativeness, risk-taking and especially autonomy have a positive effect on market performance during conference calls, while competitive aggressiveness has a negative effect. No effect was found for proactiveness.
The effect of entrepreneurial proclivity on firm value is not uniform. Not all dimensions of CE have a positive effect on market performance at a corporate level, and measuring each dimension of CE separately may be a valuable approach for future research.
Firms may create more value when they cue specific entrepreneurial attributes, and cueing competitive aggressiveness may not be desirable.
This study fills a gap in the literature by measuring the direct effect of CE cues on market performance through an innovative research design which relies on computer-aided text analysis.
