Title

Employee incentives to make firm specific investment: Implications for resource-based theories of corporate diversification

Publication Type

Journal Article

Publication Date

2006

Abstract

We argue that the risk associated with the value of a firm's core resources has an impact on employee decisions to make firm-specific investments, independent of the threat of opportunism that might exist in a particular exchange. We further explore mechanisms firms may adopt to mitigate the employee incentive problem stemming from the risk associated with core resource value. These arguments shed new light on resource-based theories of corporate diversification.

Keywords

incentives in industry, industrial management, investments, employees, decision making, diversification in industry, risk management in business, business enterprises, diversified companies, business planning, employee motivation, management

Discipline

Business Administration, Management, and Operations | Finance and Financial Management

Research Areas

Finance

Publication

Academy of Management Review

Volume

31

Issue

2

First Page

466

Last Page

476

ISSN

0363-7425

Identifier

10.5465/AMR.2006.20208691

Publisher

Academy of Management

Additional URL

http://www.jstor.org/stable/20159212