The effects of CEO equity ownership and firm diversification on risk taking

This research explores the effects of CEO equity ownership and corporate diversification on firms' risk‐taking and risk avoidance behaviors. Hypotheses regarding these effects are tested through econometric analysis of mergers in the U.S. cable television industry. Risk taking and avoidance are measured as horizontal expansion through acquisitions and as the divestiture of assets, respectively, in the face of increasing environmental turbulence. Copyright © 2002 John Wiley & Sons, Ltd.