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Governance Structure, Product Diversification, and Performance

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  • van Oijen, A.A.C.J.
  • Hendrikse, G.W.J.

Abstract

Product diversification and its financial outcomes have been studied exhaustively. However, previous literature has focused on corporations, ignoring other important legal organizations or governance structures. In this paper, we study the diversification strategies of cooperatives and compare them with corporations. We develop hypotheses that predict that cooperatives differ from corporations with respect to the extent, type, and performance of product diversification. Data obtained from a sample of 118 cooperatives and corporations are used to test the hypotheses. We find significant differences between cooperatives and corporations. Therefore, our main conclusion is that governance structure does matter for product diversification and its performance. Other governance structures, besides corporations and cooperatives, and their influence in other areas, besides product diversification, could be promising directions for future research.

Suggested Citation

  • van Oijen, A.A.C.J. & Hendrikse, G.W.J., 2002. "Governance Structure, Product Diversification, and Performance," ERIM Report Series Research in Management ERS-2002-51-ORG, Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam.
    • Handle: RePEc:ems:eureri:203
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    References listed on IDEAS

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    More about this item

    Keywords

    companies; cooperatives; governance structure; product diversification;
    All these keywords.

    JEL classification:

    • L12 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Monopoly; Monopolization Strategies
    • M - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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