University of Cincinnati Lindner College of Business

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All risk-taking is not the same: Examining the competing effects of risk-taking on firm risk and firm performance with meta-analysis

Author(s): M Arrfelt, M Mannor, J Nahrgang, Amanda Christensen

Status: Accepted
Year: 2016
Publication Name: Review of Managerial Science, Page Number(s): 1-40


Abstract

Although researchers have vigorously studied organizational risk-taking for over 35 years, relatively little emphasis has been placed on theoretically differentiating the unique relationships between the many risk-taking choices organizations make and firm risk or firm performance. In this research, we propose a new framework that builds from March’s exploration–exploitation model to argue that different risk-taking choices can have substantially different influences on firm outcomes. We use meta-analysis to examine the unique and at times competing effects of four of the most commonly studied risk-taking choices on firm risk and firm performance. Results from a meta-analysis of 257 unique studies (N = 499,808) demonstrate support for our proposed framework and cast significant doubt on the idea that commonly studied firm risk-taking choices theoretically aggregate into one overarching risk-taking construct.


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