The Diversification-Performance relationship in Spanish Firms: Does The CEO/S Behaviour Style matter?

Almudena Martinez-Campillo and Roberto Fernandez-Gago

European Research Studies Journal, 2008, vol. XI, issue 1-2, 57-70

Abstract: The agency-stewardship theoretical framework posits that CEOs may choose to act as agents or as stewards. CEOs as agents are economically rational individuals driven by self-interest, whereas CEOs as stewards are self-actualizing individuals that behave pro-organizationally. Our study extends this framework to analyze whether the CEO/s behavior style affects the diversification-performance relationship. After applying Heckman/s method on a sample of Spanish firms, our results verify that diversification affects positively on firm performance and such effect is significantly strong when this strategy is managed and implemented by a CEO inclined to behave as steward.

Keywords: Diversification strategy; firm performance; CEOs behavior style; agent; steward (search for similar items in EconPapers)
Date: 2008
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Persistent link: https://EconPapers.repec.org/RePEc:ers:journl:v:xi:y:2008:i:1-2:p:57-70

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