Anmerkungen:
Nach Informationen von SSRN wurde die ursprüngliche Fassung des Dokuments June 13, 2017 erstellt
Beschreibung:
We document a significant increase in firms' revenue growth rate as they approach $100 million annual revenue. We identify substantial capital markets and other visibility benefits to firms achieving this goal, including discontinuous increases in analyst and media coverage and in transient and growth-focused institutional investment. We find no evidence of decreased investment efficiency or overall profitability. We find that firm CEOs benefit through higher bonuses, pay-for-performance sensitivity, and stock and stock option awards in the year after reaching the goal. We find that firms make acquisitions, expand their labor forces, and increase leasing of assets to reach $100 million revenue. Collectively, our results suggest that achieving $100 million revenue is a critical event in the trajectory of firm growth that enhances firms' capital market receptions and information environments and sharpens CEOs' incentives. These results constitute rare systematic firm-level evidence of upward-striving, and they suggest conditions under which setting challenging goals enables firms to achieve positive performance effects