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The Diversification-Performance relationship in Spanish Firms: Does The CEO/S Behaviour Style matter?

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  • Almudena Martinez-Campillo
  • Roberto Fernandez-Gago

Abstract

The agency-stewardship theoretical framework posits that CEOs may choose to act as agents or as stewards. CEOs as agents are economically rational individuals driven by self-interest, whereas CEOs as stewards are self-actualizing individuals that behave pro-organizationally. Our study extends this framework to analyze whether the CEO/s behavior style affects the diversification-performance relationship. After applying Heckman/s method on a sample of Spanish firms, our results verify that diversification affects positively on firm performance and such effect is significantly strong when this strategy is managed and implemented by a CEO inclined to behave as steward.

Suggested Citation

  • Almudena Martinez-Campillo & Roberto Fernandez-Gago, 2008. "The Diversification-Performance relationship in Spanish Firms: Does The CEO/S Behaviour Style matter?," European Research Studies Journal, European Research Studies Journal, vol. 0(1-2), pages 57-70.
    • Handle: RePEc:ers:journl:v:xi:y:2008:i:1-2:p:57-70
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    References listed on IDEAS

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