search query: @indexterm diversification / total: 686
reference: 87 / 686
| Author: | Aggarwal, R.K. Samwick, A.A. |
| Title: | Why do managers diversify their firms? Agency reconsidered |
| Journal: | Journal of Finance
2003 : FEB, VOL. 58:1, p. 71-118 |
| Index terms: | Agency theory Diversification Managers Shareholders |
| Language: | eng |
| Abstract: | A contradicting model between shareholders and managers is developed. In the model managers diversify their firm for two reasons: to reduce idiosyncratic risk and to capture private benefits. The comparative static predictions of the model are tested. In contrast to previous works, it is found that diversification is positively related to managerial incentives. |
SCIMA