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On corporate structure, strategy, and performance: a study with directed acyclic graphs and PC algorithm

Author

Listed:
  • Hogun Chong

    (Management Department, Korea Rural Economic Institute, Seoul, Korea)

  • Mary Zey

    (Department of Management Science and Statistics, University of Texas at San Antonio, TX, USA)

  • David A. Bessler

    (Department of Agricultural Economics, Texas A&M University, College Station, TX, USA)

Abstract

This paper reconsiders empirical evidence on relationships among variables related to corporate strategy, structure, and performance. Causal relationships among variables are modeled as directed acyclic graphs using PC-algorithm. Return on Assets appears to be determined by Advertising Intensity, Unrelated Diversification, R&D Intensity, and Organizational Ownership Hierarchy. Debt Structure and Investor Characteristics do not cause (either directly or indirectly) return on assets. These latter two variables appear to be effects of return on assets, not causes. Results offer mixed support of the theory that structure causes strategy, which in turn causes performance. Copyright © 2009 John Wiley & Sons, Ltd.

Suggested Citation

  • Hogun Chong & Mary Zey & David A. Bessler, 2010. "On corporate structure, strategy, and performance: a study with directed acyclic graphs and PC algorithm," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 31(1), pages 47-62.
    • Handle: RePEc:wly:mgtdec:v:31:y:2010:i:1:p:47-62
    DOI: 10.1002/mde.1475
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    References listed on IDEAS

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