The Conglomerate Discount in Germany and the Relationship to Corporate Governance
AbstractThis paper documents the conglomerate discount for all available German firms and the DAX 30 firms in detail. It shows a moderate discount of about 0.06 based on German comparable firms and of about 0.20 for a combined sample of German and European peer groups. I further examine the relationship between the discount and industry concentration as well as uncertainty of valuation. Finally, I document that corporate governance behavior affects the conglomerate discount.
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Bibliographic InfoPaper provided by Sonderforschungsbereich 649, Humboldt University, Berlin, Germany in its series SFB 649 Discussion Papers with number SFB649DP2005-063.
Length: 43 pages
Date of creation: Dec 2005
Date of revision:
conglomerate discount; corporate governance;
Find related papers by JEL classification:
- G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-01-24 (All new papers)
- NEP-EEC-2006-01-24 (European Economics)
- NEP-FIN-2006-01-24 (Finance)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Servaes, Henri, 1996. " The Value of Diversification during the Conglomerate Merger Wave," Journal of Finance, American Finance Association, American Finance Association, vol. 51(4), pages 1201-25, September.
- John A. Doukas & Ozgur B. Kan, 2004. "Excess Cash Flows and Diversification Discount," Financial Management, Financial Management Association, Financial Management Association, vol. 33(2), Summer.
- Glaser, Markus & MÃ¼ller, Sebastian, 2006. "Der Diversification Discount in Deutschland: Existiert ein Bewertungsabschlag fÃ¼r diversifizierte Unternehmen?," Sonderforschungsbereich 504 Publications, Sonderforschungsbereich 504, UniversitÃ¤t Mannheim;Sonderforschungsbereich 504, University of Mannheim 06-13, Sonderforschungsbereich 504, UniversitÃ¤t Mannheim;Sonderforschungsbereich 504, University of Mannheim.
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