Managerial Incentives to Diversify and Shareholder Monitoring: Evidence From International Acquisitions
Document Type
Review Article
Publication Date
11-19-2005
Journal / Book Title
Multinational Business Review
Abstract
The authors examine how a firm’s risk change around an international acquisition is related to the managerial equity interest in the firm. Focusing on the international acquisitions made by bidding fi rms that have weak monitoring from outside shareholders, those that make an acquisition in an unrelated industry, and those that experience negative stock returns around announcements, the authors find that managers of these firms tend to undertake risk-decreasing international acquisitions with the increase of managerial equity ownership and previously granted stock options. The evidence suggests that managerial incentives to use foreign acquisitions to reduce the risk of their personal wealth are more often utilized in the absence of shareholder monitoring.
DOI
10.1108/1525383X200500016
MSU Digital Commons Citation
Kim, Dong-Kyoon; Kwok, Chuck C.Y.; and Young Baek, H., "Managerial Incentives to Diversify and Shareholder Monitoring: Evidence From International Acquisitions" (2005). Department of Accounting and Finance Faculty Scholarship and Creative Works. 80.
https://digitalcommons.montclair.edu/acctg-finance-facpubs/80
Published Citation
Kim, D. K., Kwok, C. C., & Baek, H. Y. (2005). Managerial incentives to diversify and shareholder monitoring: Evidence from international acquisitions. Multinational Business Review.