Abstract
I consider the strategic implications of corporate governance by examining the relationship between diversification and board composition, considering both agency theory and the resource-based view of the firm. Many Japanese electronics companies have performed sluggishly and instituted major governance and management reforms. The strategic choice between focus and diversification is the foremost issue for Japanese firms aiming to improve their performance.?This study uses a multivariate regression model with data from 217 Japanese electronics corporations for the fiscal year 2013 to examine the impact of board composition on decisions regarding corporate diversification. I find that corporate boards encourage corporations to pursue value-generating activities. I also argue that corporate boards can evaluate the quality of resources and allocate rents inside companies, as boards encourage firms to make use of idiosyncratic resources.
Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
