Diversification Strategies and Firm Performance: The Impact of Corporate Management Capabilities
Type
conference paper
Date Issued
2008-08-11
Author(s)
Abstract
Following a capability-based view of the firm, we argue that the inconsistent findings on the relationship between horizontal diversification and firm performance may result from a lacking focus of the literature on the role of the corporate management. Based on a sample of 164 European financial institutions we find a significant curvilinear relationship between diversification and market-based performance (Tobin's Q), but not for diversification and accounting-based performance (ROI). Our results indicate, however, that multibusiness firms benefit from a corporate management capability to foster cross-business collaboration and from a risk management capability. This research therefore contributes to a managerial perspective on corporate diversification.
Language
English
Keywords
Multibusiness firms
diversification
corporate center
HSG Classification
contribution to scientific community
Refereed
Yes
Book title
Academy of Management Annual Meeting Proceedings
Publisher
Academy of Management (AOM)
Publisher place
Briarcliff Manor, NY
Start page
36
Event Title
68th Academy of Management Annual Meeting (AOM) 2008 "The Questions We Ask"
Event Location
Anaheim, CA
Event Date
08.-13.08.2008
Subject(s)
Division(s)
Eprints ID
46087