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1 CREM - Centre de Recherche en Economie et Management

Abstract : We are looking for traces of managerial opportunism in french diversifyingacquisitions. Indeed, following various theories, diversification is seeking by managers.Furthermore, recent empiric evidences show that corporate diversification is valuedestructive for shareholders. Using classical OLS methodology with diversification,management ownership and performance variables, we find some evidence of managerialopportunism. But classical methodology presents two shortages. First, it supposed a uniquesense of causality. In particular, firm diversification is supposed to impact firmperformance without considering the inverse relationship from performance todiversification. This one-way analysis can create biases in the estimated results. Second,this OLS methodology doesn-t permit to take simultaneously the relationship between ourvariables. Noticing that this classical methodology is not well adapted to the problem, wesubmit our data to a system of simultaneous equations. Using this system, according to usbetter adapted, the faint traces of managerial opportunism vanishes. This is the case inparticular because the negative impact of diversification on performance disappears whenwe consider a non recursive relation between the variables. We derive others surprisingresults from our simultaneaous equations framework. Management stake in the equity caninfluence or be influenced by the performance depending on wether the performance ismeasured at the firm or at the operation acquisition level. Together, these results suggestthat we have to be cautious when searching for managerial opportunism in sample andstatistical studies. If manager opportunist inclination can be suspected in this kind ofstudies, it has to be distinguished from manager opportunist behavior which is far moredifficult to exhibit.

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Mots-clés : opportunisme managerial acquisitions diversification de l-entreprise

keyword : managerial opportunism acquisition corporate diversification agence performance

Autor: Frédéric Perdreau -



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