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The Cost of Diversity: The Diversification Discount and Inefficient Investment
Rajan, Raghuram G.; Servaes, Henri; Zingales, Luigi - National Bureau of Economic Research (NBER) - 1998
In a simple model of capital budgeting in a diversified firm where headquarters has limited power, we show that funds are allocated towards the most inefficient divisions. The distortion is greater the more diverse are the investment opportunities of the firm's divisions. We test these...
Persistent link: https://www.econbiz.de/10005777474
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The Cost of Diversity: The Diversification Discount and Inefficient Investment
Rajan, Raghuram G; Servaes, Henri; Zingales, Luigi - C.E.P.R. Discussion Papers - 1998
In a simple model of capital budgeting in a diversified firm where headquarters have limited power, we show that funds are allocated towards the most inefficient divisions. The distortion is greater, when the investment oppotunities of the firm’s divisions are more diverse. We test these...
Persistent link: https://www.econbiz.de/10005666944
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The Tyranny of the Inefficient : An Enquiry into the Adverse Consequences of Power Struggles
Zingales, Luigi - 2000
There are many instances where two closely related parties do not agree to mutually advantageous transactions even when there are simple enforceable contracts, and side transfers of fungible resources, that would implement them. Peace treaties are not signed, inefficient regulations are not...
Persistent link: https://www.econbiz.de/10012743651
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The Firm as a Dedicated Hierarchy : A Theory of the Origin and Growth of Firms
Rajan, Raghuram G. - 2008
In the formative stages of their businesses, entrepreneurs have to provide incentives for employees to protect, rather than steal, the source of organizational rents. We study how the entrepreneur's response to this problem determines the organization'sinternal structure,...
Persistent link: https://www.econbiz.de/10012728364
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The Cost of Diversity : The Diversification Discount and Inefficient Investment
Rajan, Raghuram G. - 2008
In a simple model of capital budgeting in a diversified firm where headquarters has limited power, we show that funds are allocated towards the most inefficient divisions The distortion is greater the more diverse are the investment opportunities of the firm's divisions. We test these...
Persistent link: https://www.econbiz.de/10012728396
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The Cost of Diversity : The Diversification Discount and Inefficient Investment
Rajan, Raghuram G. - 2008
In a simple model of capital budgeting in a diversified firm where headquarters has limited power, we show that funds are allocated towards the most inefficient divisions The distortion is greater the more diverse are the investment opportunities of the firm's divisions. We test these...
Persistent link: https://www.econbiz.de/10012775014
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Innovation and institutional ownership
Aghion, Philippe; Van Reenen, John; Zingales, Luigi - London School of Economics (LSE) - 2009
We find that institutional ownership in publicly traded companies is associated with more innovation (measured by cite … substitution effect between institutional ownership and product market competition (and managerial entrenchment generally), the … be fired in the face of profit downturns when institutional ownership is higher. Finally, using instrumental variables …
Persistent link: https://www.econbiz.de/10010745303
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In brief: Two cheers for Anglo-Saxon financial markets?
Aghion, Philippe; Reenen, John Van; Zingales, Luigi - Centre for Economic Performance, LSE - 2012
We find that institutional ownership in publicly traded companies is associated with more innovation (measured by cite … substitution effect between institutional ownership and product market competition (and managerial entrenchment generally), the … be fired in the face of profit downturns when institutional ownership is higher. Finally, using instrumental variables …
Persistent link: https://www.econbiz.de/10010549053
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Innovation and Institutional Ownership
Aghion, Philippe; Reenen, John Van; Zingales, Luigi - In: American Economic Review 103 (2013) 1, pp. 277-304
We find that greater institutional ownership is associated with more innovation. To explore the mechanism, we contrast … career risks. The evidence favors career concerns. First, we find complementarity between institutional ownership and product … the face of profit downturns when institutional ownership is higher. Finally, using instrumental variables, policy changes …
Persistent link: https://www.econbiz.de/10010604497
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Innovation and institutional ownership
Aghion, Philippe; Van Reenen, John; Zingales, Luigi - 2010
We find that institutional ownership in publicly traded companies is associated with more innovation (measured by cite … substitution effect between institutional ownership and product market competition (and managerial entrenchment generally), the … be fired in the face of profit downturns when institutional ownership is higher. Finally, using instrumental variables …
Persistent link: https://www.econbiz.de/10010272476