Title

The Effect Of The Degree Of Ownership Control On Firm Diversification, Market Value, And Merger Activity

Comments

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Abbreviated Journal Title

J. Bus. Res.

Keywords

Business

Abstract

This paper provides additional evidence that manager-controlled firms do not pursue the same objectives as owner-controlled firms. Using recent data of the Fortune 500, it is shown that 1) manager-controlled companies have a significantly greater tendency to engage in conglomerate mergers than do firms with strong owner control; 2) the income streams of manager-controlled firms are more diversified than those of companies with strong owner control; 3) individual owners tend to monitor their managers closely even if their ownership interest is relatively small, while financial institutions that are owners do not monitor closely unless their interest is large; and 4) the value-to-sales ratio is lower for manager-controlled companies than for owner-controlled ones.

Journal Title

Journal of Business Research

Volume

15

Issue/Number

4

Publication Date

1-1-1987

Document Type

Article

Language

English

First Page

303

Last Page

312

WOS Identifier

WOS:A1987J931500002

ISSN

0148-2963

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