Resource dependence theory

About: Resource dependence theory is a research topic. Over the lifetime, 2732 publications have been published within this topic receiving 184871 citations.

The financial performance of hospitals belonging to health networks and systems.

Abstract: The U.S. health industry is experiencing substantial restructuring through ownership consolidation and development of new forms of interorganizational relationships. Using an established taxonomy of health networks and systems, this paper develops and tests four hypotheses related to hospital financial performance. Consistent with our predictions, we find that hospitals in health systems that had unified ownership generally had better financial performance than hospitals in contractually based health networks. Among health network hospitals, those belonging to highly centralized networks had better financial performance than those belonging to more decentralized networks. However, health system hospitals in moderately centralized systems performed better than those in highly centralized systems. Finally, hospitals in networks or systems with little differentiation or centralization experienced the poorest financial performance. These results are consistent with resource dependence, transaction cost economics, and institutional theories of organizational behavior, and provide a conceptual and empirical baseline for future research.

Board demographic diversity, independence, and corporate social performance

Abstract: – Drawing on agency theory and resource dependence theory, the study aims to link board demographic diversity and independence to corporate social performance., – Data were collected from various sources for a sample of 475 publicly traded Fortune 500 companies between the years 2007 and 2008., – It is found that board gender diversity is positively related to institutional and technical strength ratings, while board racial diversity is positively related to institutional strength rating only. Both the proportion of outside directors and CEO non‐duality were negatively associated with institutional and technical weakness ratings., – The sample was predominantly large, publicly traded national and international corporations, which might limit the generalizability of the findings., – Management personnel should be cognizant of how board configurations and leadership structure may influence their corporate reputation for social responsibility. Efforts should be made to foster a group dynamic that is conducive to effective board functioning., – Few empirical studies have examined the relationship between board characteristics and corporate social performance. This study contributes to the literature by examining such associations.

Are Political Connections a Blessing or a Curse? Evidence from CEO Turnover in China

Abstract: Manuscript Type: Empirical Research Question/Issue: This paper investigates the issue of forced CEO turnover in China and summarizes the economic consequences of political connections within the framework of corporate governance. Research Findings/Insights: Using a large sample of listed firms in China from 2005 to 2008, we find that politically connected CEOs are less likely to be fired and that the sensitivity of forced turnover to firm performance is weaker for connected CEOs than for their non-connected peers. This suggests that CEOs in a transition economy tend to use their political resources for their own good. We also find a significantly positive relationship between the political connections of retained CEOs and future firm performance only when firm profitability is below the industry median. These findings suggest that the value of political connections is contingent on a firm's operating performance, and that the benefits of political connections may outweigh their costs when firms do not meet their profitability targets. Theoretical/Academic Implications: This study is the first to examine how the political ties of CEOs relate to their forced turnover. It integrates agency theory with resource dependence theory and contributes to the ongoing debate on the role of political connections in emerging markets. It also takes a step toward reconciling the mixed evidence for the effects of political connections on firm performance by demonstrating a sharp difference between firms under different operating statuses. Practitioner/Policy Implications: This study offers insights to policy makers who are interested in improving corporate governance in transitional economies such as China, where CEOs have close connections with the government. It also provides a deep perspective for the boards in politically connected firms, allowing them to deal with the relationship between top management and the government in a healthy way.

"outside" directors in sme boards: a call for theoretical reflections

Abstract: Good governance for SMEs is critical for economic development and growth in both developed and developing economies. In this paper we focus on boards and governance in small and medium sized enterprises (SMEs) by investigating the role and contribution of “outside” directors in this setting. By contrasting board role theories against different types of SMEs, firms are expected to recruit “outside” board members for various reasons. Illustrated by 52 empirical studies of “outside” directors in SMEs we show how agency theory, resource based view of the firm, and resource dependence theory can be applied to understand the multiple roles that “outside” directors can play in family firms, venture capital-backed firms and other SMEs. The illustration shows that the concept “outside” director is not the same in different theories and in different empirical settings. Based on this finding, we argue for the need to have a conscious and balanced use of theories for understanding the role and contribution of “outside” directors in SMEs.

Explaining thewelfare state: power resources vs. the Quality of Government

Abstract: The hitherto most successful theory explaining why similar industrialized market economies have developed such varying systems for social protection is the Power Resource Theory (PRT), according to which the generosity of the welfare state is a function of working class mobilization. In this paper, we argue that there is an under-theorized link in the micro-foundations for PRT, namely why wage earners trying to cope with social risks and demand for redistribution would turn to the state for a solution. Our approach, the Quality of Government (QoG) theory, stresses the importance of trustworthy, impartial, and uncorrupted government institutions as a precondition for citizens’ willingness to support policies for social insurance. Drawing on data on 18 OECD countries during 1984–2000, we find (a) that QoG positively affects the size and generosity of the welfare state, and (b) that the effect of working class mobilization on welfare state generosity increases with the level of QoG.