This paper presents evidence that subsidiaries of multinational firms have higher valuations than locally matched firms. Using a unique sample of 251 UK multinational firms and 4,676 subsidiaries, the paper finds that multinational firms achieve, on average, an international diversification...

We propose and test a view of corporate diversification as a strategy that exploits internal information markets, by bringing together information that is scattered across the economy. First, we construct an inter-industry network using input-output data, to proxy for the economy's information...

Why do some firms enter a new market by acquiring an existing company operating in this market (external entry), while more than 90% of firms do so by building on their existing resources (internal entry)? This paper shows that human capital acquisition is a key motive behind firms' decision to...

We document a strong decline in corporate-diversification activity since the late 1970's, and we develop a dynamic model that explains this pattern, both qualitatively and quantitatively. The key feature of the model is that synergies endogenously decline with technological specialization,...

This study investigates the role of organizational learning on the valuation effects of corporate diversification. The empirical findings suggest that corporate diversification reduces shareholders' wealth. However, consistent with the absorptive capacity viewpoint of organizational learning,...

Researchers have long tried to define the impact of corporate diversification on firm value. Academic papers mainly concentrate on the effects of corporate diversification in mature markets while its consequences in emerging capital markets are less explored. This article presents the results of...

Once a preferred strategy, diversification has gradually been deinstitutionalized in the United States over the past several decades. We argue that changes that occurred in a closely related domain — graduate business education — are important in understanding variation in de-diversification...

Measurement of diversification has always remained one of the critical issues in earlier studies. During the past half-century or more, many measures of corporate diversification have been suggested (and applied) by a number of authors. These ranged from qualitative to quantitative measures and...

We examine whether institutional investors' portfolio diversification affects corporate diversification and related practices. Estimating investor portfolio diversification using their holdings' return characteristics, we find a negative relationship between portfolio and corporate...

We survey the recent literature on corporate diversification. How does corporate diversification influence firm value? Does it create or destroy value? Until the beginning of this century, the predominant thinking among researchers and practitioners was that corporate diversification leads to an...