Managerial ownership and corporate diversification: a longitudinal view

Maria Goranova, Todd M. Alessandri, Pamela Brandes and Ravi Dharwadkar

Strategic Management Journal, 2007, vol. 28, issue 3, 211-225

Abstract: Strategy and finance research suggests that managerial ownership results in increased incentive alignment and therefore is negatively related to corporate diversification. Using a longitudinal approach, we develop arguments to examine whether managerial ownership is associated with subsequent changes in diversification and/or if diversification is associated with subsequent changes in ownership. The results indicate that levels of managerial ownership in one time period are not associated with subsequent changes in corporate diversification, which raises incentive alignment questions. We also find that higher levels of corporate diversification are associated with changes in managerial ownership, which suggests support for the employment risk‐reduction perspective. This study provides important reasons to reassess the longitudinal implications of the managerial ownership‐corporate diversification link from both theoretical and managerial perspectives. Copyright © 2007 John Wiley & Sons, Ltd.

Date: 2007
References: Add references at CitEc
Citations: View citations in EconPapers (30)

Downloads: (external link)
https://doi.org/10.1002/smj.570

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:stratm:v:28:y:2007:i:3:p:211-225

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0143-2095

Access Statistics for this article

More articles in Strategic Management Journal from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().