Corporate governance and diversification in a scenario of weak shareholder protection

  1. Maia Ramires, Elida
  2. Miguel Hidalgo, Alberto de
  3. Brío González, Esther B. del
Estableciendo puentes en una economía global
  1. Pindado García, Julio (coord.)
  2. Payne, Gregory (coord.)

Publisher: Escuela Superior de Gestión Comercial y Marketing, ESIC

ISBN: 978-84-7356-556-1

Year of publication: 2008

Volume Title: Ponencias

Volume: 1

Pages: 76

Congress: Asociación Europea de Dirección y Economía de Empresa. Congreso Nacional (22. 2008. Salamanca)

Type: Conference paper


We examine the influence of governance mechanisms, namely ownership structure and insider ownership, on the selection of corporate strategies of diversification in a scenario characterized by poor protection of shareholders� interests. We find evidence of a quadratic relationship between ownership concentration and diversification and a cubic relationship between diversification and insider ownership. Additionally, our results show that control mechanisms such as debt, directors� remuneration and the compliance with codes of good practices are negatively related to the level of diversification.