This study investigates whether managerial ability affects the degree of corporate diversification. Further, it examines whether the performance effect of diversification depends on managerial ability. Using a sample of US firms from 2013 to 2017, this study finds that managerial ability is negatively correlated with corporate diversification strategies. This study also found that managerial ability positively moderates the relationship between diversification and firm performance.
JEL classification numbers: G34, M41.
Keywords: Corporate diversification strategies, Managerial ability, Corporate diversification performance.
ISSN: 1792-6599 (Online)