A cornerstone in finance theory continues to be the positive relationship between risk and return in spite of Fama and French (The Journal of Finance 47(2) (1992) 427-65) and several later papers finding no relationship between the two variables. Twelve years earlier, Bowman (Sloan Management Review 1980, pp. 17-31) studied the same relationship from organization theory, achieving similar results with accounting data, and developing a whole research stream known as "Bowman's paradox". This stream has contributed to some curious and interesting ideas that could also be applied to other different streams: new risk measures, managerial goal selection, response to the decline in the organization, diversification strategy on risk and return, among others. Similar to the financial stream, a number of researchers have tried to study this issue from the strategic management perspective. Their inconclusive results have generated a considerable controversy, keeping this research stream alive. In this work, we describe and explore this phenomenon from "Bowman's paradox", theoretical explanations, criticisms and future orientations.
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Article provided by Elsevier in its journal Omega.
Volume (Year): 30 (2002) Issue (Month): 1 (February) Pages: 1-18 Download reference. The following formats are available: HTML
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