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The effects of CEO equity ownership and firm diversification on risk taking
Author(s) -
Eisenmann Thomas R.
Publication year - 2002
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.236
Subject(s) - divestment , diversification (marketing strategy) , equity (law) , business , mergers and acquisitions , financial economics , monetary economics , industrial organization , accounting , economics , finance , marketing , political science , law
Abstract This research explores the effects of CEO equity ownership and corporate diversification on firms' risk‐taking and risk avoidance behaviors. Hypotheses regarding these effects are tested through econometric analysis of mergers in the U.S. cable television industry. Risk taking and avoidance are measured as horizontal expansion through acquisitions and as the divestiture of assets, respectively, in the face of increasing environmental turbulence. Copyright © 2002 John Wiley & Sons, Ltd.