In the paper, we find that diversification reduces the heterogeneity of investor beliefs on firm value. We obtain this finding by comparing not only between diversified and focused firms but also between diversifying and non-diversifying mergers. We also find that the reduced heterogeneity of...

We estimate the effect of corporate diversification on firm value using a sample of 766 segment-year observations during 2004 – 2008 for firms listed on the Australian Stock Exchange as of August 2009. In addition to conventionally used measures of diversification, we develop five new measures...

For cooperative games with transferable utilities (TU games) excess functions e : R2 ! R1 whose values e(x(S); v(S)); S N are relative negative utilities of coalitions S with respect to their payos x(S) = Pi2S xi are dened. The excess values for the class of two-person games are dened as those...

We estimate the effect of corporate diversification on firm value using a sample of 766 segment-year observations during 2004–2008 for firms listed on the Australian Stock Exchange as of August 2009. In addition to conventionally used measures of diversification, we develop five new...

While the balance sheet structure of U.S. banks influences how they respond to liquidity risks, the mechanisms for the effects on and consequences for lending vary widely across banks. We demonstrate fundamental differences across banks without foreign affiliates versus those with foreign...

Business groups in emerging markets perform better than unaffiliated firms. One explanation is that business groups substitute some functions of missing institutions, for example, enforcing contracts. We investigate this by setting up a model where firms within the business group are connected...

The Benefit and Cost of Winner Picking: Redistribution Vs Incentives

Tournaments are used in a variety of contexts for ranking competitors on an ordinal scale according to their relative achievements. From competitive sports to manager compensation, they provide a mechanism for incentivizing and selecting contestants in a world of incomplete information. This...