Performance Effects of Owner Identity and Diversification: An Agency-Theoretic Assessment
Type
conference paper
Date Issued
2011-11-07
Author(s)
Abstract
Recent research suggests that owners such as institutions, families, and corporations have distinct characteristics. While these differences seem to have implications for a firm's corporate strategy and performance, empirical evidence is still sparse. We address this gap with a study of the combined effect of owner identity and diversification on firm performance. Drawing upon agency theory, we argue that owners differ in their incentives to monitor, costs of monitoring, and abilities to monitor a firm's management and, therefore, prefer different diversification strategies. Further, we propose that the fit between owner identity and diversification strategy benefits firm performance. Results from a large-scale sample of 643 US firms over an eight-year period largely support our hypotheses.
Language
English
Keywords
Agency Theory
Ownership
Owner Identity
Diversification
HSG Classification
contribution to scientific community
Refereed
Yes
Book title
Strategies for a Multi-Polar World
Publisher
SMS Strategic Management Society
Publisher place
Chicago
Start page
29
Event Title
31st Strategic Management Society (SMS) Annual International Conference
Event Location
Miami, FL
Event Date
06.-09.11.2011
Subject(s)
Eprints ID
162904