Corporate Diversification and Firm Value:Evidence from Post-1997 Data
Our paper examines the relation between corporate diversification and firm value using U. S. data over the period 1998-2004 under the segment reporting standard SFAS 131 introduced in 1997. Both traditional diversification measures and measures of diversity that are arguably more theoretically appealing for post-1997 data confirm the existence of a diversification discount in our whole sample. Consistent with previous studies, we find that the diversification discount is only significant when a firm increases the number of industries from one to two. In contrast , when we use diversity in investment opportunities as the measure of the degree of diversification , we find that firms with the lowest degree of diversity are likely to have a premium compared to focused firms. Furthermore, the sub-sample analysis reveals that the negative relation between diversity and firm value is only statistically significant in highly diversified firms and the greatest discount occurs in highly diversified small firms.
He Xi
The Australian National University, Canberra
国内会议
南昌
英文
116-138
2007-04-13（万方平台首次上网日期，不代表论文的发表时间）