Corporate governance and diversification in a scenario of weak shareholder protection
- Maia Ramires, Elida
- Miguel Hidalgo, Alberto de
- Brío González, Esther B. del
- Pindado García, Julio (coord.)
- 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
Abstract
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.