Does corporate ownership structure affect its strategy towards diversification?

Amihud, Yakov; Lev, Baruch

doi:10.1002/(sici)1097-0266(199911)20:11<1063::aid-smj69>3.0.co;2-s

Cited by 203 publications

(146 citation statements)

References 32 publications

(30 reference statements)

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“…First, managers with high equity ownership or high firmspecific human capital derive utility from diversification and the attendant reduction of the idiosyncratic risks that they personally face, despite the fact that stockholders could diversify on their own -at least to some extent-in capital markets (Amihud & Lev, 1999;May, 1995).…”

Section: Theoretical Perspectives Underlying Non-shareholder-value-mamentioning

confidence: 99%

“…Amihud & Lev, 1999;Denis, Denis & Sarin, 1997;May, 1995) a lively debate has played out in this area on whether the act of monitoring by a firm's principal influences a firm's diversification strategy (e.g. Lane, Cannella & Lubatkin, 1998;Amihud & Lev, 1999;Denis, Denis & Sarin, 1999;Lane, Cannella & Lubatkin, 1999).…”

Section: Theoretical Perspectives Underlying Non-shareholder-value-mamentioning

confidence: 99%

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Redirecting Research Efforts on the Diversification–Performance Linkage: The Search for Synergy

Ahuja

Novelli

2017

ANNALS

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This is the accepted version of the paper.This version of the publication may differ from the final published version. Permanent repository link AcknowledgmentsThe authors would like to thank the editors and reviewers for their very constructive and insightful comments through the review process. Elena Novelli also gratefully acknowledges the financial support of the ESRC Future Research Leaders Scheme (Grant ES/K001388/1) and Cass Business School. Gautam Ahuja would like to thank the University of Michigan for support. 2 AbstractWe review the literature on the diversification-performance (D-P) relationship to a) propose that the time is ripe for a renewed attack on understanding the relationship between diversification and firm performance, and b) outline a new approach to attacking the question.Our paper makes four main contributions. First, through a review of the literature we establish the inherent complexities in the D-P relationship and the methodological challenges confronted by the literature in reaching its current conclusion of a non-linear relationship between diversification and performance. Second, we argue that to better guide managers the literature needs to develop along a complementary path -whereas past research has often focused on answering the big question of does diversification affect firm performance, this second path would focus more on identifying the precise micro-mechanisms through which diversification adds or subtracts value. Third, we outline a new approach to the investigation of this topic, based on (a) identifying the precise underlying mechanisms through which diversification affects performance; (b) identifying performance outcomes that are "proximate" to the mechanism that the researcher is studying, and (c) identifying an appropriate research design that can enable a causal claim. Finally, we outline a set of directions for future research.3

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Section: Theoretical Perspectives Underlying Non-shareholder-value-mamentioning

confidence: 99%

Section: Theoretical Perspectives Underlying Non-shareholder-value-mamentioning

confidence: 99%

Redirecting Research Efforts on the Diversification–Performance Linkage: The Search for Synergy

Ahuja

Novelli

2017

ANNALS

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“…They entrench themselves by specific investment that reduce the risk of their revocation and make themselves valuable to shareholders and costly to replace. Amihud and Lev (1999) and Stulz (1990) also point that through diversification, it is assumed that managers extend firm size, decrease firm risk at the expense of lower stockholders income and developing more personal gains. Accoding to Pigé (1998) entrenchment is analyzed from two points of view: (i) from manager himself, entrenchment concerns all things and behavior that can maintain his job, increase his liberty to decide and obtain private benefits (Charreaux, 1997).…”

Section: Entrenchement Behavior Manager Ownership and Diversificationmentioning

confidence: 99%

Corporate Board Characteristics, Managerial Entrenchment and Diversification Strategy: Evidence from Tunisian Context

Marouan¹

2015

IJBM

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The aim of this paper is to analyze the role of the board of directors and the management entrenchment in the explanation of diversification strategy of the Tunisian firms. In particular we focus on the characteristics of these two opposite directions bodies where the first controls the second in explaining the strategic choices of the firm. We find evidence for the negative effect of the board size and outside directors on the diversification strategy of the firm. The empirical result points also the negative effect of the CEO duality, which is inconsistent with the agency hypothesis.

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“…Nonetheless, in strategy research scholars have looked into M&As using several conceptual lenses, from a transaction costs view (Hennart & Reddy, 1997), resource-based view (Anand & Singh, 1997;Capron et al, 1998;Zollo & Singh, 2004), organization learning (Hayward, 2002), agency theory (Jensen & Ruback, 1983;Amihud & Lev, 1999) and finance or financerelated concepts (Chatterjee, 1986;1992) pertaining to M&As.…”

Section: Literature Reviewmentioning

confidence: 99%

Three decades of strategic management research on M&As: Citations, co-citations, and topics

Ferreira

Reis

Pinto

2016

Global Economics and Management Review

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Merger and acquisitions (M&As) strategies have been growingly deployed by firms for their domestic and international expansion, to redefine their business scope or take advantage of emerging opportunities. In this paper we conduct a bibliometric study of the extant strategy research on M&As, assessed by the articles published in the main journal for strategic management studies over the period 1984-2010. Results reveal the highest impact works (articles and books), the intellectual ties among authors and theories that form five main clusters of research, and the topics delved into. Performance effects, M&As as diversification strategies and RBV and capabilities-based topics have dominated the extant research. The study contributes to the extant knowledge on M&As by taking stock of the accumulated knowledge and research direction, complementing other literature reviews with a strategic management specific perspective. Thus, we provide a rear view of the field which facilitates detecting untapped gaps that may be munificent avenues for future research.

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Does corporate ownership structure affect its strategy towards diversification?

Cited by 203 publications

References 32 publications

Redirecting Research Efforts on the Diversification–Performance Linkage: The Search for Synergy

Redirecting Research Efforts on the Diversification–Performance Linkage: The Search for Synergy

Corporate Board Characteristics, Managerial Entrenchment and Diversification Strategy: Evidence from Tunisian Context

Three decades of strategic management research on M&As: Citations, co-citations, and topics

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