Determinants and Performance Effects of the Allocation of Ownership Rights in Consulting Firms

Journal of Organizational Behavior, Vol. 29, pp. 1049-1074, Spring 2007

Posted: 12 May 2009

See all articles by Ansgar Richter

Ansgar Richter

University of Liverpool - Management School (ULMS)

Katrin Schroeder

affiliation not provided to SSRN

Date Written: May 30, 2007

Abstract

This paper provides a joint assessment of the antecedents and the performance consequences of the allocation of ownership rights in professional service firms (PSFs). Drawing on established economic theory, we argue that the efficiency implications of alternative ownership arrangements drive the allocation of ownership rights. We test our arguments using a sample of 119 large and medium-sized consulting firms. The results confirm the significance of capital requirements, service standardization, business risk, and organization size as determinants of the allocation of ownership rights in these firms. We do not find ownership allocation per se to be a significant driver of performance. The results suggest that the optimal allocation of ownership rights is endogenously determined by the conditions under which consulting firms operate.

Keywords: Ownership rights, professional services

Suggested Citation

Richter, Ansgar and Schroeder, Katrin, Determinants and Performance Effects of the Allocation of Ownership Rights in Consulting Firms (May 30, 2007). Journal of Organizational Behavior, Vol. 29, pp. 1049-1074, Spring 2007. Available at SSRN: https://ssrn.com/abstract=1402528

Ansgar Richter (Contact Author)

University of Liverpool - Management School (ULMS) ( email )

Chatham Street
Liverpool, L69 7ZH
United Kingdom
44 [0]151 795 3713 (Phone)
44 [0]151 795 3001 (Fax)

Katrin Schroeder

affiliation not provided to SSRN

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