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- Title
An Environmental Perspective on Diversification: The Effects of Chemical Relatedness and Regulatory Sanctions.
- Authors
Diestre, Luis; Rajagopalan, Nandini
- Abstract
This study integrates resource-based and institutional theory perspectives to examine relationships between the relatedness of chemicals used within the home and target industries of a potential diversifier, target industry regulatory sanctions, and the likelihood of diversification. First, we provide evidence that the level of such chemical relatedness between a home and a target industry increases the likelihood of diversification. Second, we find that the level of target industry regulatory sanctions has an inverted U-shaped effect on the likelihood that a firm will diversify into that industry. We also provide some evidence that chemical relatedness amplifies the inverted U-shaped effect of target industry regulatory sanctions.
- Subjects
CLEANING compounds industry; DIVERSIFICATION in industry; ENVIRONMENTAL responsibility; HOUSE cleaning; ENVIRONMENTAL management; INSTITUTIONAL theory (Sociology)
- Publication
Academy of Management Journal, 2011, Vol 54, Issue 1, p97
- ISSN
0001-4273
- Publication type
Article
- DOI
10.5465/AMJ.2011.59215087