Is the restructuring-performance relationship moderated by the economic cycle and the institutional environment for corporate governance?

Francisco Forcadell, Angelica Sanchez-Riofrio, Luis Ángel Guerras-Martín and Desiderio Romero-Jordán

Journal of Business Research, 2020, vol. 110, issue C, 397-407

Abstract: This study analyses the effect that the institutional environment for corporate governance and the economic cycle have on the relationship between the business portfolio restructuring (BPR) strategy and corporate performance. For this purpose, we use institutional theory, incorporating the notion of organizational slack to highlight the differences in firm performance between institutional settings along the different phases of economic cycle. We found that market-oriented corporate governance systems generate, during a period of economic growth, a smaller positive effect of each particular BPR movement on company performance, compared to network-oriented systems. Additionally, market-oriented corporate governance systems contribute to counteract part of the negative effect of the economic crisis. In contrast, network-oriented corporate governance systems are not able to avoid the potentially negative effect of an economic crisis on this relationship, amplifying the negative effect of the economic crisis on performance. We use data from 15 European countries for the period 1998–2015.

Keywords: Business portfolio restructuring; Institutional environment for corporate governance; Performance; Institutional theory (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0148296320300667
Full text for ScienceDirect subscribers only

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:eee:jbrese:v:110:y:2020:i:c:p:397-407

DOI: 10.1016/j.jbusres.2020.01.055

Access Statistics for this article

Journal of Business Research is currently edited by A. G. Woodside

More articles in Journal of Business Research from Elsevier
Bibliographic data for series maintained by Catherine Liu ().