In this paper, we show that Tobin's q and firm diversification are negatively related. This negative relation holds for different diversification measures and when we control for other known determinants of q. We show further that diversified firms have lower q's than equivalent portfolios of...

In this paper, we show that Tobin's q and firm diversification are negatively related. This negative relation holds for different diversification measures and when we control for other known determinants of q. We show further that diversified firms have lower q's than equivalent portfolios of...

Using a large sample of stocks from 48 developed and emerging markets, we show that the benefits of diversification persist during the global financial crisis, the coronavirus pandemic, and other hard times, demonstrating their countercyclicality. This result suggests that the benefits of...