The structure of ownership and corporate acquisition strategies
Article first published online: 29 NOV 2001
Copyright © 2002 John Wiley & Sons, Ltd.
Strategic Management Journal
Volume 23, Issue 1, pages 41–53, January 2002
How to Cite
Wright, P., Kroll, M., Lado, A. and Van Ness, B. (2002), The structure of ownership and corporate acquisition strategies. Strat. Mgmt. J., 23: 41–53. doi: 10.1002/smj.208
- Issue published online: 29 NOV 2001
- Article first published online: 29 NOV 2001
- Manuscript Revised: 7 MAY 2001
- Manuscript Received: 10 MAR 2000
- agency theory;
- corporate acquisition strategies;
- firm risk taking;
- acquisition performance
In this study, we examine in an agency-theoretic context the influence of executive equity stakes upon corporate strategy and firm value. We argue that beneficial, risk-increasing corporate strategies may initially be emphasized but non-value-maximizing, risk-reducing strategies may subsequently be emphasized as managers expand their stock ownership. We alternatively contend that stock options may have a consistently positive impact on firm risk taking and acquisition returns. The empirical findings are supportive of our expectations. Copyright © 2002 John Wiley & Sons, Ltd.