In this paper we examine the effect of corporate diversification on the equity issue process. In a sample of 641 equity issues conducted over the 1983-1994 time period, we find evidence that equity issues by diversified firms are viewed less negatively by the market than are equity issues by...

We examine the effect of corporate diversification on the equity issue process in a sample of 641 equity issues from 1983 to 1994. We find that issues by diversified firms are viewed less negatively by the market than are issues by focused firms. This finding supports the hypothesis that...

We assemble a sample of over 10,000 customer-supplier relationships and determine whether the customer owns equity in the supplier. We find that factors related to both contractual incompleteness and financial market frictions are important in the decision of a customer firm to take an equity...