Professor Narayanan's current research focuses on corporate governance. In particular, his research with Nejat Seyhun has been instrumental in exposing the practice of executive option backdating. He has worked on various corporate financial topics such as corporate scope, managerial behavior, and management compensation. On corporate scope, he has written about the motives for divestitures, how conglomeration can result in inefficient capital allocation, and about the patterns of corporate diversification across various industries and over time. On managerial compensation, he has written about how various compensation schemes distort managerial decision horizons, causing, for example, managerial myopia.