Explaining the Diversification Discount
Author
Abstract
(This abstract was borrowed from another version of this item.)
Suggested Citation
Download full text from publisher
Other versions of this item:
- Jose Manuel Campa & Simi Kedia, 2002. "Explaining the Diversification Discount," Journal of Finance, American Finance Association, vol. 57(4), pages 1731-1762, August.
- Campa, Jose M. & Kedia, Simi, 2000. "Explaining the diversification discount," IESE Research Papers D/424, IESE Business School.
References listed on IDEAS
- Gordon M Phillips & Vojislav Maksimovic, 1999. "Do Conglomerate Firms Allocate Resources Inefficiently?," Working Papers 99-11, Center for Economic Studies, U.S. Census Bureau.
- Rotemberg, Julio J & Saloner, Garth, 1994. "Benefits of Narrow Business Strategies," American Economic Review, American Economic Association, vol. 84(5), pages 1330-1349, December.
- Stein, Jeremy C, 1997.
"Internal Capital Markets and the Competition for Corporate Resources,"
Journal of Finance, American Finance Association, vol. 52(1), pages 111-133, March.
- Jeremy C. Stein, 1995. "Internal Capital Markets and the Competition for Corporate Resources," NBER Working Papers 5101, National Bureau of Economic Research, Inc.
- Berger, Philip G & Ofek, Eli, 1996. "Bustup Takeovers of Value-Destroying Diversified Firms," Journal of Finance, American Finance Association, vol. 51(4), pages 1175-1200, September.
- Karl V. Lins & Henri Servaes, 2002. "Is Corporate Diversification Beneficial in Emerging Market?," Financial Management, Financial Management Association, vol. 31(2), Summer.
- Comment, Robert & Jarrell, Gregg A., 1995. "Corporate focus and stock returns," Journal of Financial Economics, Elsevier, vol. 37(1), pages 67-87, January.
- Owen A. Lamont & Christopher Polk, 2001. "The Diversification Discount: Cash Flows Versus Returns," Journal of Finance, American Finance Association, vol. 56(5), pages 1693-1721, October.
- John G. Matsusaka, 1993.
"Takeover Motives during the Conglomerate Merger Wave,"
RAND Journal of Economics, The RAND Corporation, vol. 24(3), pages 357-379, Autumn.
- Matsusaka, J.C., 1991. "Takeover Motives During the Conglomerate Merger Wave," Papers 91-33, Southern California - School of Business Administration.
- Lewellen, Wilbur G, 1971. "A Pure Financial Rationale for the Conglomerate Merger," Journal of Finance, American Finance Association, vol. 26(2), pages 521-537, May.
- Lang, Larry & Poulsen, Annette & Stulz, Rene, 1995.
"Asset sales, firm performance, and the agency costs of managerial discretion,"
Journal of Financial Economics, Elsevier, vol. 37(1), pages 3-37, January.
- Larry Lang & Annette Poulsen & Rene M. Stulz, 1994. "Asset Sales, Firm Performance, and the Agency Costs of Managerial Discretion," NBER Working Papers 4654, National Bureau of Economic Research, Inc.
- Meyer, Margaret & Milgrom, Paul & Roberts, John, 1992.
"Organizational Prospects, Influence Costs, and Ownership Changes,"
Journal of Economics & Management Strategy, Wiley Blackwell, vol. 1(1), pages 9-35, Spring.
- Meyer, Margaret A & Milgrom, Paul & Roberts, Donald John, 1992. "Organizational Prospects, Influence Costs, and Ownership Changes," CEPR Discussion Papers 665, C.E.P.R. Discussion Papers.
- Hausman, Jerry, 2015.
"Specification tests in econometrics,"
Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 38(2), pages 112-134.
- Hausman, Jerry A, 1978. "Specification Tests in Econometrics," Econometrica, Econometric Society, vol. 46(6), pages 1251-1271, November.
- J. A. Hausman, 1976. "Specification Tests in Econometrics," Working papers 185, Massachusetts Institute of Technology (MIT), Department of Economics.
- Lamont, Owen, 1997.
"Cash Flow and Investment: Evidence from Internal Capital Markets,"
Journal of Finance, American Finance Association, vol. 52(1), pages 83-109, March.
- Owen Lamont, 1996. "Cash Flow and Investment: Evidence from Internal Capital Markets," NBER Working Papers 5499, National Bureau of Economic Research, Inc.
- Stulz, ReneM., 1990. "Managerial discretion and optimal financing policies," Journal of Financial Economics, Elsevier, vol. 26(1), pages 3-27, July.
- Tarun Khanna & Krishna Palepu, 2000. "Is Group Affiliation Profitable in Emerging Markets? An Analysis of Diversified Indian Business Groups," Journal of Finance, American Finance Association, vol. 55(2), pages 867-891, April.
- Raghuram Rajan & Henri Servaes & Luigi Zingales, 2000.
"The Cost of Diversity: The Diversification Discount and Inefficient Investment,"
Journal of Finance, American Finance Association, vol. 55(1), pages 35-80, February.
- Raghuram Rajan & Henry Servaes & Luigi Zingales, "undated". "The Cost of Diversity: The Diversification Discount and Inefficient Investment," CRSP working papers 463, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Raghuram Rajan & Henri Servaes & Luigi Zingales, 1998. "The Cost of Diversity: The Diversification Discount and Inefficient Investment," NBER Working Papers 6368, National Bureau of Economic Research, Inc.
- Rajan, Raghuram G & Servaes, Henri & Zingales, Luigi, 1998. "The Cost of Diversity: The Diversification Discount and Inefficient Investment," CEPR Discussion Papers 1801, C.E.P.R. Discussion Papers.
- Raghuram Rajan & Henri Servaes & Luigi Zingales, "undated". "The Cost of Diversity: The Diversification Discount and Inefficient Investment," CRSP working papers 357, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
- Hadlock, Charles J & Ryngaert, Michael & Thomas, Shawn, 2001. "Corporate Structure and Equity Offerings: Are There Benefits to Diversification?," The Journal of Business, University of Chicago Press, vol. 74(4), pages 613-635, October.
- Owen Lamont & Christopher Polk, "undated".
"The Diversification Discount: Cash Flows vs. Returns.","
CRSP working papers
504, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Owen Lamont & Christopher Polk, 1999. "The Diversification Discount: Cash Flows vs. Returns," NBER Working Papers 7396, National Bureau of Economic Research, Inc.
- Toni M. Whited, 2001. "Is It Inefficient Investment that Causes the Diversification Discount?," Journal of Finance, American Finance Association, vol. 56(5), pages 1667-1691, October.
- David S. Scharfstein & Jeremy C. Stein, 2000.
"The Dark Side of Internal Capital Markets: Divisional Rent‐Seeking and Inefficient Investment,"
Journal of Finance, American Finance Association, vol. 55(6), pages 2537-2564, December.
- David S. Scharfstein & Jeremy C. Stein, 1997. "The Dark Side of Internal Capital Markets: Divisional Rent-Seeking and Inefficient Investment," NBER Working Papers 5969, National Bureau of Economic Research, Inc.
- Myerson, Roger B., 1982. "Optimal coordination mechanisms in generalized principal-agent problems," Journal of Mathematical Economics, Elsevier, vol. 10(1), pages 67-81, June.
- M. Harris & C. H. Kriebel & A. Raviv, 1982. "Asymmetric Information, Incentives and Intrafirm Resource Allocation," Management Science, INFORMS, vol. 28(6), pages 604-620, June.
- Matsusaka, John G, 2001. "Corporate Diversification, Value Maximization, and Organizational Capabilities," The Journal of Business, University of Chicago Press, vol. 74(3), pages 409-431, July.
- John R. Graham & Michael L. Lemmon & Jack G. Wolf, 2002. "Does Corporate Diversification Destroy Value?," Journal of Finance, American Finance Association, vol. 57(2), pages 695-720, April.
- Vojislav Maksimovic & Gordon Phillips, 2001.
"The Market for Corporate Assets: Who Engages in Mergers and Asset Sales and Are There Efficiency Gains?,"
Journal of Finance, American Finance Association, vol. 56(6), pages 2019-2065, December.
- Gordon M Phillips & Vojislav Maksimovic, 1999. "The Market for Corporate Assets: Who Engages in Mergers and Asset Sales and are there Efficiency Gains?," Working Papers 99-12, Center for Economic Studies, U.S. Census Bureau.
- John, Kose & Ofek, Eli, 1995. "Asset sales and increase in focus," Journal of Financial Economics, Elsevier, vol. 37(1), pages 105-126, January.
- Debra J. Aron, 1988. "Ability, Moral Hazard, Firm Size, and Diversification," RAND Journal of Economics, The RAND Corporation, vol. 19(1), pages 72-87, Spring.
- Gordon M Phillips & Vojislav Maksimovic, 1998. "Optimal Firm Size and the Growth of Conglomerate and Single-Industry Firms," Working Papers 98-14, Center for Economic Studies, U.S. Census Bureau.
- Fluck, Zsuzsanna & Lynch, Anthony W, 1999. "Why Do Firms Merge and Then Divest? A Theory of Financial Synergy," The Journal of Business, University of Chicago Press, vol. 72(3), pages 319-346, July.
- Myers, Stewart C., 1977. "Determinants of corporate borrowing," Journal of Financial Economics, Elsevier, vol. 5(2), pages 147-175, November.
- Lang, Larry H P & Stulz, Rene M, 1994.
"Tobin's q, Corporate Diversification, and Firm Performance,"
Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1248-1280, December.
- Larry H.P. Lang & Rene M. Stulz, 1993. "Tobin's Q, Corporate Diversification and Firm Performance," NBER Working Papers 4376, National Bureau of Economic Research, Inc.
- Avinash K. Dixit & Robert S. Pindyck, 1994. "Investment under Uncertainty," Economics Books, Princeton University Press, edition 1, number 5474.
- Benjamin E. Hermalin & Michael S. Weisbach, 1991.
"The Effects of Board Composition and Direct Incentives on Firm Performance,"
Financial Management, Financial Management Association, vol. 20(4), Winter.
- Hermalin, B.E. & Weisbech, M.S., 1991. "The Effects of Board Composition and Direct Incentives on Firm Performance," Papers 91-02, Rochester, Business - Financial Research and Policy Studies.
- Denis, David J & Denis, Diane K & Sarin, Atulya, 1997. "Agency Problems, Equity Ownership, and Corporate Diversification," Journal of Finance, American Finance Association, vol. 52(1), pages 135-160, March.
- David S. Scharfstein, 1998. "The Dark Side of Internal Capital Markets II: Evidence from Diversified Conglomerates," NBER Working Papers 6352, National Bureau of Economic Research, Inc.
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
- Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-161, January.
- Gordon M. Bodnar & Charles Tang & Joseph Weintrop, 1997.
"Both Sides of Corporate Diversification: The Value Impacts of Geographic and Industrial Diversification,"
NBER Working Papers
6224, National Bureau of Economic Research, Inc.
- Bodnar, G.M. & Tang, C. & Weintrop, J., 1998. "Both Sides of Corporate Diversification: The Value Impacts of Geographic and Industrial Diversification," Weiss Center Working Papers 98-02, Wharton School - Weiss Center for International Financial Research.
- Wernerfelt, Birger & Montgomery, Cynthia A, 1988. "Tobin's q and the Importance of Focus in Firm Performance," American Economic Review, American Economic Association, vol. 78(1), pages 246-250, March.
- J. Myles Shaver, 1998. "Accounting for Endogeneity When Assessing Strategy Performance: Does Entry Mode Choice Affect FDI Survival?," Management Science, INFORMS, vol. 44(4), pages 571-585, April.
- Cynthia A. Montgomery & Birger Wernerfelt, 1988. "Diversification, Ricardian Rents, and Tobin's q," RAND Journal of Economics, The RAND Corporation, vol. 19(4), pages 623-632, Winter.
- Servaes, Henri, 1996. "The Value of Diversification during the Conglomerate Merger Wave," Journal of Finance, American Finance Association, vol. 51(4), pages 1201-1225, September.
- Jensen, Michael C, 1988. "Takeovers: Their Causes and Consequences," Journal of Economic Perspectives, American Economic Association, vol. 2(1), pages 21-48, Winter.
- Karl Lins & Henri Servaes, 1999. "International Evidence on the Value of Corporate Diversification," Journal of Finance, American Finance Association, vol. 54(6), pages 2215-2239, December.
- Morck, Randall & Yeung, Bernard, 1992. "Internalization : An event study test," Journal of International Economics, Elsevier, vol. 33(1-2), pages 41-56, August.
- Berger, Philip G. & Ofek, Eli, 1995. "Diversification's effect on firm value," Journal of Financial Economics, Elsevier, vol. 37(1), pages 39-65, January.
Most related items
These are the items that most often cite the same works as this one and are cited by the same works as this one.- Campa, Jose M. & Chang, P. H. Kevin & Refalo, James F., 2002.
"An options-based analysis of emerging market exchange rate expectations: Brazil's Real Plan, 1994-1999,"
Journal of Development Economics, Elsevier, vol. 69(1), pages 227-253, October.
- Campa, Jose M. & Chang, Kevin & Refalo, James F., 2000. "Options-based analysis of emerging market exchange rate expectations: Brazil's real plan, 1994-1999, An," IESE Research Papers D/425, IESE Business School.
- José M. Campa & P.H. Kevin Chang & James F. Refalo, 2000. "An Options-Based Analysis of Emerging Market Exchange Rate Expectations: Brazil's Real Plan, 1994-1999," Working Papers wp2000_0006, CEMFI.
- Campa, J.M. & Chang, P.H.K. & Refalo, J.F., 2000. "An Options-Based Analysis of Emerging Market Exchange Rate Expectations: Brazil's Real Plan, 1994-1999," Papers 0006, Centro de Estudios Monetarios Y Financieros-.
- Chang, Kevin & Campa, José Manuel & Refalo, James F, 2000. "An Options-Based Analysis of Emerging Market Exchange Rate Expectations: Brazil?s Real Plan, 1994-1999," CEPR Discussion Papers 2611, C.E.P.R. Discussion Papers.
- Stefan Erdorf & Thomas Hartmann-Wendels & Nicolas Heinrichs & Michael Matz, 2013. "Corporate diversification and firm value: a survey of recent literature," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 27(2), pages 187-215, June.
- Martin, John D. & Sayrak, Akin, 2003. "Corporate diversification and shareholder value: a survey of recent literature," Journal of Corporate Finance, Elsevier, vol. 9(1), pages 37-57, January.
- Stein, Jeremy C., 2003.
"Agency, information and corporate investment,"
Handbook of the Economics of Finance, in: G.M. Constantinides & M. Harris & R. M. Stulz (ed.), Handbook of the Economics of Finance, edition 1, volume 1, chapter 2, pages 111-165,
Elsevier.
- Jeremy C. Stein, 2001. "Agency, Information and Corporate Investment," NBER Working Papers 8342, National Bureau of Economic Research, Inc.
- Ma. Belén Lozano GarcÃa & Alberto de Miguel Hidalgo & Diana Monserrat RÃos RodrÃguez, 2013. "Responsible Diversification: Knowing Enough About Diversification To Do It Responsibly: Motives, Measures And Consequences," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(15), pages 1-19.
- Laeven, Luc & Levine, Ross, 2007.
"Is there a diversification discount in financial conglomerates?,"
Journal of Financial Economics, Elsevier, vol. 85(2), pages 331-367, August.
- Luc Laeven & Ross Levine, 2005. "Is There a Diversification Discount in Financial Conglomerates?," NBER Working Papers 11499, National Bureau of Economic Research, Inc.
- Levine, Ross & Laeven, Luc, 2005. "Is There a Diversification Discount in Financial Conglomerates?," CEPR Discussion Papers 5121, C.E.P.R. Discussion Papers.
- Jandik, Tomas & Makjija, Anil K., 2004. "Can Diversification Create Value? Evidence from the Electric Utility Industry," Working Paper Series 2005-7, Ohio State University, Charles A. Dice Center for Research in Financial Economics.
- Laeven, Luc, 2001. "International evidence on the value of product and geographic diversity," Policy Research Working Paper Series 2729, The World Bank.
- Cheng, Louis T.W. & Leung, T.Y., 2004. "A comparative analysis of the market-based and accounting-based performance of diversifying and non-diversifying acquisitions in Hong Kong," International Business Review, Elsevier, vol. 13(6), pages 763-789, December.
- Matsusaka, John G. & Nanda, Vikram, 2002. "Internal Capital Markets and Corporate Refocusing," Journal of Financial Intermediation, Elsevier, vol. 11(2), pages 176-211, April.
- Dey, Tania & Banerjee, Rajabrata, 2011. "Can Corporate Diversification Promote Firm Value? A Survey," MPRA Paper 28928, University Library of Munich, Germany.
- Doukas, John A. & Kan, Ozgur B., 2008. "Investment decisions and internal capital markets: Evidence from acquisitions," Journal of Banking & Finance, Elsevier, vol. 32(8), pages 1484-1498, August.
- Lamont, Owen A. & Polk, Christopher, 2002.
"Does diversification destroy value? Evidence from the industry shocks,"
Journal of Financial Economics, Elsevier, vol. 63(1), pages 51-77, January.
- Owen A. Lamont & Christopher Polk, "undated". "Does Diversification Destroy Value? Evidence from Industry Shocks."," CRSP working papers 521, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Owen Lamont & Christopher Polk, 2000. "Does Diversification Destroy Value? Evidence From Industry Shocks," NBER Working Papers 7803, National Bureau of Economic Research, Inc.
- Felipe Balmaceda, 2009.
"Mergers and CEO Power,"
Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 165(3), pages 454-486, September.
- Felipe Balmaceda, 2006. "Mergers and CEO power," Documentos de Trabajo 224, Centro de Economía Aplicada, Universidad de Chile.
- Nilakshi Borah & Liu Pan & Jung Chul Park & Nan Shao, 2018. "Does corporate diversification reduce value in high technology firms?," Review of Quantitative Finance and Accounting, Springer, vol. 51(3), pages 683-718, October.
- Andreou, Panayiotis C. & Doukas, John A. & Koursaros, Demetris & Louca, Christodoulos, 2019. "Valuation effects of overconfident CEOs on corporate diversification and refocusing decisions," Journal of Banking & Finance, Elsevier, vol. 100(C), pages 182-204.
- Felipe Balmaceda, 2002. "Corporate Diversification: Good for Some Bad for Others," Documentos de Trabajo 141, Centro de Economía Aplicada, Universidad de Chile.
- Klein, Peter G, 2001.
"Were the Acquisitive Conglomerates Inefficient?,"
RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 745-761, Winter.
- Peter G. Klein, 1997. "Were the Acquisitive Conglomerates Inefficient?," Industrial Organization 9711001, University Library of Munich, Germany, revised 04 Feb 2002.
- van Lelyveld, Iman & Knot, Klaas, 2009.
"Do financial conglomerates create or destroy value? Evidence for the EU,"
Journal of Banking & Finance, Elsevier, vol. 33(12), pages 2312-2321, December.
- van Lelyveld, I. & Knot, K.H.W., 2008. "Do financial conglomerates create or destroy value? Evidence for the EU," Research Report 08003, University of Groningen, Research Institute SOM (Systems, Organisations and Management).
- Iman van Lelyveld & Klaas Knot, 2008. "Do financial conglomerates create or destroy value? Evidence for the EU," DNB Working Papers 174, Netherlands Central Bank, Research Department.
- Villalonga, Belen, 2000. "Does Diversification Cause the “Diversification Discount”?," University of California at Los Angeles, Anderson Graduate School of Management qt40v212gm, Anderson Graduate School of Management, UCLA.
More about this item
JEL classification:
- F20 - International Economics - - International Factor Movements and International Business - - - General
- F29 - International Economics - - International Factor Movements and International Business - - - Other
Statistics
Access and download statisticsCorrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ste:nystbu:99-06. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Amanda Murphy (email available below). General contact details of provider: https://edirc.repec.org/data/ednyuus.html .
Please note that corrections may take a couple of weeks to filter through the various RePEc services.