Business groups are important in many countries. Several studies have looked at the performance and behavior of firms that are members of a business group. This paper looks at the issue in more detail and tries to answer some related questions. First, do business groups really have internal capital markets and do they provide efficient resource allocation (in a view of the controlling sharehold...

This paper examines optimal compensation contracts when executives can hedge their personal portfolios. In a simple principal-agent framework, I predict that the Chief Executive Officer’s (CEO’s) pay-performance sensitivity decreases with the executivehedging cost. Empirically, I find evidence supporting the model’s prediction. Providing further support for the theory, I show that shareholders ...

We analyze the impact credit constraints have on how firms structure their dealings with their partners in the supply chain; and hence how imperfect capital markets can alter short run prices and long run investment levels. Credit constrained firms are shown to become endogenously risk averse and so seek to push some risk onto suppliers. Our predictions reflect risk sharing contracts in general...

Market prices of corporate bond spreads and of credit default swap (CDS) rates do not match each other. In this paper, we argue that the liquidity premium, the cheapest-to-deliver (CTD) option and actual market segmentation explain the pricing differences. Using the European transaction data from Reuters and Bloomberg, we estimate the liquidity premium that is timevarying and firm-specific. We ...

a r t i c l e i n f o The first decade of the twenty-first century has witnessed a significant increase in technology strategy research related to innovation capacity and technological diversity. Recent studies in the field of innovation capacity investigate whether the underlying performance differential among firms is attributable to organizational slack resources. However, few scholars have ...

Business environment in Nigeria is becoming increasingly competitive, uncertain and complex. These changes are happening so fast that organisations desire to remain business must speedily adapt adopt new strategies meet the demands of dynamic environment. The research determines effect corporate diversification on financial performance industrial goods. espoused ex-post facto data from annual r...

 Strategic planning aims to harness a company’s core competencies to capitalise on identified environmental opportunities and minimise or avoid environmental threats.  As marketing managers bridge the gap between company, customers, competitors and channels of distribution, they not only manage their marketing strategies, but also tend to be highly influential in business and corporate strate...

The resource-based view on firm diversification, subsequent to Penrose (1959), has focused primarily on the fungibility of resources across domains. We make a clear analytical distinction between scale-free capabilities and those that are subject to opportunity costs and must be allocated to one use or another, thereby shifting the discourse back to Penrose’s (1959) original argument regarding ...