Corporate Political Resources in Diversified Firms: The Role of Industry Relatedness

The Institute of Economics will hold a seminar meeting as part of its Seminar Series on Tuesday, April 5, 2022: Marco Giarratana from the IE Business School will present the paper "Corporate Political Resources in Diversified Firms: The Role of Industry Relatedness".

Abstract:

The authors study the performance of resource-driven diversification and unrelatedness. They focus on corporate political resources (CPR) and argue that the performance effect of CPR on a focal firm business unit will depend on industry relatedness between the business unit and the core industry of the firm. Perhaps counter-intuitively, they argue that relatedness between target and acquired industry could negatively moderate the impact of CPR on performance. The paper uses a sample of 3,780 acquisitions from 2000-2014 that compares the productivity growth of targets in acquisitions. The empirical findings are consistent with predictions and with a view that points out how costs of internal resource competition could harm related diversification.

The seminar will be held in blended mode. In person participation is possible and available seats are allocated on a first come first served basis. For online participation please use the following link.