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This article examines how heterogeneous features among business groups influence the corporate diversification – firm …, corporate diversification enhances firm performance. However, business group diversity does not influence the diversification … – performance relationship. The impact of diversification on firm performance differs substantially owing to the heterogeneity in …
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Unlike conglomerates in the U.S., where investment flows may be distorted due to power struggles (Rajan, Servaes, and Zingales (2000)), we find that diversified business groups in India, on average, invest efficiently. Our analysis controls for the possibility of tunneling (Bertrand, Mehta, and...
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valuations. We find that there is a diversification discount: The marketvalues financial conglomerates that engage in multiple … indicate that economies of scope arenot sufficiently large to produce a diversification premium …
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