Behind the curtain of international diversification: An agency theory perspective

Pasquale Massimo Picone, Maurizio La Rocca, Claudio Giachetti, Pasquale Massimo Picone, Giovanni Battista Dagnino

Risultato della ricerca: Articlepeer review

16 Citazioni (Scopus)


This paper dissects the antecedents of international diversification through the lens of the agency cost of free cash flow arguments. It explores whether the partial convergence of interests among managers, majority shareholders, and minority shareholders affects a firm's choice to diversify internationally. Using a sample panel of 60 Italian firms evaluated longitudinally from 2004 to 2014, the study tests whether a firm's international diversification is affected by its free cash flow (as the ultimate source of managerial discretion) and debt (as the main constraint to managerial discretion), especially in firm contexts that exacerbate agency problems. We find that the effects on international diversification of free cash flow and debt are contingent on ownership concentration, family control, and growth opportunities.
Lingua originaleEnglish
pagine (da-a)555-594
Numero di pagine40
Stato di pubblicazionePublished - 2019

All Science Journal Classification (ASJC) codes

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