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Does Diversification Destroy Value? Evidence From Industry Shocks

Lamont, Owen - 2000

Does corporate diversification reduce shareholder value? Since firms endogenously choose to diversify, exogenous … variation in diversification is necessary in order to draw inferences about the causal effect. We examine changes in the within … investment, are negatively related to firm value. Thus diversification destroys value, consistent with the inefficient internal …

Persistent link: https://www.econbiz.de/10012470947

The Diversification Discount : Cash Flows vs. Returns

Lamont, Owen - 1999

Diversified firms have different values than comparable portfolios of single-segment firms. These value differences must be due to differences in either future cash flows or future returns. Expected security returns on diversified firms vary systematically with relative value. Discount firms...

Persistent link: https://www.econbiz.de/10012471389

Corporate Focusing and Internal Capital Markets

Schlingemann, Frederik P. - 1999

A sample of firms that focus by divesting at least one segment allows us to investigate the characteristics of segments divested as well as the nature of focusing firms. We find that firms are more likely to divest segments unrelated to the core activities of the firm and that the probability...

Persistent link: https://www.econbiz.de/10012471612

Global Diversification, Growth and Welfare with Imperfectly Integrated Markets for Goods

Dumas, Bernard - 1999

In this article, we examine the effect of the imperfect mobility of goods on international risk sharing and, through that, on the investment in risky projects, welfare and growth. We find that the welfare gain of financial market openness is not monotonic with respect to investors' risk aversion...

Persistent link: https://www.econbiz.de/10012471806

Multinationals and the Gains from International Diversification

Rowland, Patrick F. - 1998

One possible explanation for home bias is that investors may obtain indirect international diversification benefits by … tests to examine the diversification potential of multinational firms and foreign market indices for investors domiciled in … multinational stocks. However, there is weak evidence that U.S. multinationals provided global diversification benefits in the full …

Persistent link: https://www.econbiz.de/10012472081

Mentoring and Diversity

Athey, Susan - 1998

This paper studies the forces which determine how diversity at a firm evolves over time. We consider a dynamic model o a single firm with two levels of employees, the entry level and the upper level. In each period, the firm selects a subset of the entry-level workers for promotion to the upper...

Persistent link: https://www.econbiz.de/10012472306

The Dark Side of Internal Capital Markets II : Evidence from Diversified Conglomerates

Scharfstein, David S. - 1998

This paper is an empirical examination of capital allocation in a sample of 165 diversified" conglomerates in 1979. I find that divisions in high-Q manufacturing industries tend to invest" less than their stand-alone industry peers, while divisions in low-Q manufacturing industries tend" to...

Persistent link: https://www.econbiz.de/10012472464

Both Sides of Corporate Diversification : The Value Impacts of Geographic and Industrial Diversification

Bodnar, Gordon M. - 1997

This paper examines the effect of geographic and industrial diversification on firm value for a sample of over 20 … diversification results in over-estimation of the negative value impact of industrial diversification, but has little impact on … estimates of the positive value impact of geographic diversification …

Persistent link: https://www.econbiz.de/10012472587

Do Nontraded Goods Explain the Home Bias Puzzle?

Pesenti, Paolo - 1996

domestic shares under full diversification. When stock-market data are directly used, the predicted coefficient of home bias …

Persistent link: https://www.econbiz.de/10012473049

Diversification, Integration and Emerging Market Closed-End Funds

Bekaert, Geert - 1995

Using an extensive new data set on U.S. and U.K.-traded closed- end funds, we examine the diversification benefits from … emerging equity markets and the extent of their integration with global capital markets. To measure diversification benefits … significant diversification benefits for the U.K. country funds, but not for the U.S. funds. The difference appears to relate to …

Persistent link: https://www.econbiz.de/10012473908

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