THE EFFECTS OF MANAGERIAL OWNERSHIP ON INTERNATIONAL AND BUSINESS DIVERSIFICATION: BALANCING INCENTIVES AND RISKS

• 成果类型: Article
• 署名作者: Alessandri, Todd M.; Seth, Anju
• 署名单位: Northeastern University; Virginia Polytechnic Institute & State University
• 刊物名称: STRATEGIC MANAGEMENT JOURNAL
• ISSN/ISSBN: 0143-2095
• DOI: 10.1002/smj.2222
• 发表日期: 2014
• 页码: 2064-2075
• 关键词: international diversification; business diversification; MANAGERIAL OWNERSHIP; Agency theory; efficient managerial contracts

摘要

Research has examined the effects of managerial share ownership on business diversification, typically from the incentive alignment perspective. Yet, share ownership also shifts risk to managers (the efficient managerial contracting perspective). Furthermore, the effects of managerial ownership on international diversification are unexplored. We examine how managerial ownership influences both international and business diversification in light of the trade-off between incentive alignment and risk bearing. Based on the differing risk profiles of the two types of diversification, we argue that incentive contracts with higher levels of managerial ownership will be inefficient, i.e., counter to shareholder interestsreducing international diversification and increasing business diversification. Our findings support our arguments for international diversification. We find no significant effect for business diversification after accounting for endogeneity and serial correlation. Copyright (c) 2013 John Wiley & Sons, Ltd.