Ownership concentration is associated with:

Question

Quizplus · Accepted Answer

Ownership concentration refers to a situation where a small group of shareholders hold a significant proportion of a company's shares. Research has shown that in such cases, firms tend to have lower levels of product diversification as concentrated ownership often results in a focus on the core business rather than expansion into new areas. Option A is incorrect as ownership concentration is not linked to experience in a wider range of industries. Option B is also incorrect as higher managerial compensation through firm growth could occur in any type of ownership structure, not just concentrated ownership. Option D is the opposite of the correct answer, as ownership concentration is linked to lower levels of product diversification.

Ownership Concentration Is Associated With