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.
diversification strategies, Managerial ability, Corporate diversification