Introduction: Corporate Finance and Strategy

Strategy and finance are closely interrelated in the practice of management and have become even more so over the past decade. With the increased informational demands resulting from regulatory changes like Sarbanes Oxley and Regulation Fair Disclosure (“Reg FD”), the boundary between the roles of the CEO of the CFO has become increasingly blurred. Moreover, the global financial crisis has made painfully salient the need to incorporate financial considerations into managerial decisions about firm strategy.

In academic research, however, the two fields have by and large developed independently of each other, even on research topics that have received much attention from both fields, such as mergers and acquisitions, corporate diversification, or corporate governance (Amit & Villalonga, 2006).