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Corporate diversification and board composition in Japanese electronics corporations

Author

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  • Takahiro NISHI

    (Meiji University)

Abstract

I consider the strategic implications of corporate governance by examining the relationship between diversification and board composition, considering both agency theory and the resource-based view of the firm. Many Japanese electronics companies have performed sluggishly and instituted major governance and management reforms. The strategic choice between focus and diversification is the foremost issue for Japanese firms aiming to improve their performance.?This study uses a multivariate regression model with data from 217 Japanese electronics corporations for the fiscal year 2013 to examine the impact of board composition on decisions regarding corporate diversification. I find that corporate boards encourage corporations to pursue value-generating activities. I also argue that corporate boards can evaluate the quality of resources and allocate rents inside companies, as boards encourage firms to make use of idiosyncratic resources.

Suggested Citation

  • Takahiro NISHI, 2015. "Corporate diversification and board composition in Japanese electronics corporations," International Journal of Business and Management, International Institute of Social and Economic Sciences, vol. 3(2), pages 27-44, May.
    • Handle: RePEc:sek:jijobm:v:3:y:2015:i:2:p:27-44
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    References listed on IDEAS

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    Cited by:

    1. Irina Berezinets & Kirill Berezkin & Yulia Ilina & Irina Naoumova, 2019. "Board Of Directors As A Factor Of Firm Performance In Innovative Companies," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 23(06), pages 1-26, August.

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    More about this item

    Keywords

    Corporate governance; Diversification; Agency Theory; Resource Based-view; Board of Director;
    All these keywords.

    JEL classification:

    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General
    • M29 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Other

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