 Peer directors’ effort, firm efficiency and performance of diversified firms: An efficacy-based view of governancePunit Arora and Ajai Gaur Journal of Business Research, 2022, vol. 151, issue C, 593-608 Abstract: Studying how boards contribute to firm performance and examining implementation costs associated with diversification strategy are domains of growing interest to strategy scholars. We integrate these incipient literatures to examine the role of Peer Independent Executive Directors’ (PIED) effort in improving the performance of diversified firms. The efficacy-based view of governance that we propose in this paper contributes to both corporate governance and diversification research by highlighting the contextual role of director domain expertise and effort in improving firm performance. Using a longitudinal sample of US firms, we show that the PIED effort is progressively beneficial for firm performance with successive increases in diversification levels, irrespective of diversification type. In case of diversified firms, PIED effort helps a firm better manage internal dynamics and opportunism among various business segments within a firm to benefit from complex diversification strategies. Keywords: Diversification; Benchmarked firm efficiency; Strategy implementation costs; Peer CEO directors; Director effort (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:151:y:2022:i:c:p:593-608 DOI: 10.1016/j.jbusres.2022.07.035 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 |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.