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- W3048767483 abstract "Purpose This paper aims to explore the explanations of “information effect” and “agency effect” of corporate diversification with cross-industry knowledge under a crisis situation. Design/methodology/approach Based on an event study of 203 public companies’ crises in China between 2008 and 2018, the authors verify the information and agency effects of corporate diversification under a crisis situation by, respectively, examining the effects of interactions of corporate unrelated diversification with corporate transparency and knowledge deficiency attribution on the stock market’s responses to the crises. Findings It is found that corporate unrelated diversification serves as a buffer in protecting firm value while attribution of knowledge deficiency can be a burden. The buffering effect is stronger when the corporate transparency is higher but weaker when the crisis is attributed to be caused by corporate tacit knowledge deficiency. Practical implications Unrelated diversified firms should strengthen information communication with stakeholders so as to break down the stakeholders’ cross-industry knowledge barriers, and thus protect their own value at the crisis’ onset. Also, they can further buffer the loss by reducing stakeholders’ perceptions of the corporate tacit knowledge deficiency revealed in the crisis. Originality/value This study is the first to illustrate that the information and agency effects of corporate diversification strategy can be partially explained under a crisis situation, which provides meaningful insights about how firms can conduct knowledge management in their daily operations to deal better with corporate crises." @default.
- W3048767483 created "2020-08-18" @default.
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- W3048767483 date "2020-08-12" @default.
- W3048767483 modified "2023-09-29" @default.
- W3048767483 title "Benefits or costs? The effects of diversification with cross-industry knowledge on corporate value under crisis situation" @default.
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- W3048767483 doi "https://doi.org/10.1108/jkm-11-2019-0659" @default.
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