Why Investors Sometimes Value Size and Diversification: The Internalization Theory of Synergy
AbstractFor most firms, size and diversification are correlated with lower value. However, for firms possessing substantial information-based asset, geographical diversification, line of business diversification, and growth in general, add value. This is consistent with information-based assets being a critical prerequisite for synergy, as postulated in internalization theories of synergy.
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Bibliographic InfoPaper provided by Research Seminar in International Economics, University of Michigan in its series Working Papers with number 411.
Length: 40 pages
Date of creation: 1997
Date of revision:
ENTERPRISES ; SYNERGY ; INVESTMENTS;
Find related papers by JEL classification:
- O10 - Economic Development, Technological Change, and Growth - - Economic Development - - - General
- O16 - Economic Development, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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