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Title: Valuing spanners : why category nesting and expertise matter
Authors: Cudennec, A 
Editors: Durand, R
Issue Date: Feb-2023
Source: Academy of Management journal, Feb. 2023, v. 66, no. 1, p. 335-365
Abstract: Organizations need to both differentiate themselves while conforming to their audiences’ expectations. To meet this demand, organizations may span different categories. However, valuing spanners is challenging for audiences. We contend that spanners’ valuation depends on category nesting, as the congruence of informational cues varies between basic categories and subcategories. Furthermore, we expect that more expert audiences find spanners to be more congruent (and hence, more valuable) at a subordinate level than at a basic level of categorization. We test our hypotheses using a mixed-methods design in the context of venture capital investments. We analyze observational data on more than 29,000 venture capital deals and develop two experimental studies. Our findings support our hypotheses that subcategory spanning lowers valuation, and that this effect is attenuated as investors’ expertise increases. Our experimental studies further show that congruence is a causal mechanism explaining these effects. Our findings have important implications for research on organizational conformity and optimal distinctiveness, categorization in markets from an information processing perspective, and the impact of expertise on valuation.
Publisher: Academy of Management
Journal: Academy of Management journal 
ISSN: 0001-4273
EISSN: 1948-0989
DOI: 10.5465/amj.2020.0042
Rights: © Academy of Management Journal
This is the accepted manuscript of the following article: Arnaud Cudennec and Rodolphe Durand, 2023: Valuing Spanners: Why Category Nesting and Expertise Matter. AMJ, 66, 335–365, which has been published in final form at
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