The DOI matches its Crossref record; 40 of the 40 references it cites were found in a registry or an index.
Why Do Managers Diversify Their Firms? Agency Reconsidered
Open accessAbstract
We develop a contracting model between shareholders and managers in which managers diversify their firms for two reasons: to reduce idiosyncratic risk and to capture private benefits. We test the comparative static predictions of our model. In contrast to previous work, we find that diversification is positively related to managerial incentives. Further, the link between firm performance and managerial incentives is weaker for firms that experience changes in diversification than it is for firms that do not. Our findings suggest that managers diversify their firms in response to changes in private benefits rather than to reduce their exposure to risk.
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Cites
Theory of the firm: Managerial behavior, agency costs and ownership structure
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Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers
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Management ownership and market valuation
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Multitask principal – agent analyses: Incentive contracts, asset ownership, and job design
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The Hubris Hypothesis of Corporate Takeovers
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Managerial discretion and optimal financing policies
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Cited by
Creditor rights and corporate risk-taking
Acharya, V. V., Amihud, Y., & Litov, L. (2011) · Journal of Financial Economics · doi:10.1016/j.jfineco.2011.04.001 · Cited by 772
Managers with and without Style: Evidence Using Exogenous Variation
Fee, C. E., Hadlock, C. J., & Pierce, J. R. (2013) · Review of Financial Studies · doi:10.1093/rfs/hhs131 · Cited by 422
CEO compensation, diversification, and incentives
Jin, L. (2002) · Journal of Financial Economics · doi:10.1016/s0304-405x(02)00150-2 · Cited by 384
Moving Closer to the Action: Examining Compensation Design Effects on Firm Risk
Devers, C. E., McNamara, G., Wiseman, R. M., & Arrfelt, M. (2008) · Organization Science · doi:10.1287/orsc.1070.0317 · Cited by 353
Empire-builders and shirkers: Investment, firm performance, and managerial incentives
Aggarwal, R. K., & Samwick, A. A. (2006) · Journal of Corporate Finance · doi:10.1016/j.jcorpfin.2006.01.001 · Cited by 299
Self-citation
Metadata
- Authors
- Aggarwal, R. K., & Samwick, A. A.
- Venue
- The Journal of Finance
- Publisher
- Wiley
- Published
- 2003-02
- Volume
- 58
- Issue
- 1
- Pages
- 71-118
- ISSN
- 0022-1082 (ISSN-L)
- 1540-6261
- OpenAlex
- W3122128043
- Cited by
- 388
- References
- 40
- FWCI
- 64.65
- Type
- journal article
- Language
- en
- Open access
- green
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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.
Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).
Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.
