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| Board Faultlines and Diversification Strategy: Based on the Moderating Effects of Chairman’s Power and Environmental Dynamics |
| GENG Xin，WANG Xianglu |
| 1.Shandong University of Finance and Economics，Jinan, China；2.Shandong Institute of Human Resources Development, Jinan, China |
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Abstract This paper analyzes and tests the impact of the board faultlines on diversification strategy with A-share listed companies in 2011~2019 as samples. The results show that the physiology-related faultline is negatively correlated with enterprise diversification level, while the task-related faultlines maintains inversely U-shaped with the diversification level. The chairman’s power has no moderating effect on the relationship between physiology-related faultlines and diversification level, but it negatively moderates the inverted U-shaped relationship between task-related faultlines and diversification level, and the turning point of the curve moves left. The environmental dynamics strengthens the negative impact of physiology-related faultlines, and negatively moderates the inverted U-shaped relationship between task-related faultlinesand diversification level, and the curve turning point moves left. After a series of tests of robustness and endogeneity, the conclusions are still valid.
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Received: 25 May 2020
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