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Who Drives Unrelated Diversification? A Study of Indian Manufacturing Firms

Asia Pacific Journal of Management volume 21, pages 403–423 (2004)Cite this article

Abstract

This paper builds on recent research that focuses on the context-specific nature of diversification and the impact of organizational ownership on the choice of diversification strategy. Set in the Indian manufacturing sector, it compares the influence of institutional investors and banks against the influence of CEOs and boards on unrelated diversification. Results show that (a) external constituents collectively have more influence on unrelated diversification than CEOs and boards, (b) institutional investors tend to discourage unrelated diversification, but banks are quite supportive of such moves, and (c) corporate governance constituents other than foreign directors do not have a statistically significant influence on unrelated diversification strategies.

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Authors and Affiliations

  1. Department of Global Business, Thunderbird:, The Garvin School of International Management, 15249 N. 59th Avenue, Glendale, AZ, 85306, USA

    Kannan Ramaswamy & Barbara S. Pécherot Petitt

  2. Department of Management, California State University, Northridge, 18111 Nordhoff Street, Northridge, CA, 91330-8245, USA

    Mingfang Li

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  1. Kannan Ramaswamy
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  2. Mingfang Li
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  3. Barbara S. Pécherot Petitt
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Ramaswamy, K., Li, M. & Petitt, B.S.P. Who Drives Unrelated Diversification? A Study of Indian Manufacturing Firms. Asia Pacific Journal of Management 21, 403–423 (2004). https://doi.org/10.1023/B:APJM.0000048711.41701.f3

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  • DOI: https://doi.org/10.1023/B:APJM.0000048711.41701.f3

  • ownership
  • diversification
  • India