Does Diversification Cause the 'Diversification Discount'?
نویسندگان
چکیده
منابع مشابه
Does Diversification Cause the "Diversification Discount"?
Using recent econometric developments about causal inference, I examine whether diversification destroys value. I estimate the value effect of diversification by matching diversifying and single-segment firms on their propensity score-the predicted values from a probit model of the propensity to diversify. I also use Heckman 's (1979) two-stage estimator for comparison purposes. Ifind that on a...
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While explicitly assuming that stock price conveys valuable information to the management, we show that the value loss from diversification is a function of the stock price informativeness. More informed stock trading leads to a more efficient investment and a smaller diversification discount. © 2007 Elsevier B.V. All rights reserved.
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[Acknowledgment] This research was supported in part by the National Science Foundation (CAREER SES 0552089), UTD Provost’s Distinguished Professorship, Brain Korea 21 Project, and Ohio State University CIBER and Center for East Asian Studies. Earlier versions were presented at the 8th Conference on the Theories and Practices of Securities and Financial Markets (Kaohsiung, 1999), Conference on ...
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ژورنال
عنوان ژورنال: SSRN Electronic Journal
سال: 2000
ISSN: 1556-5068
DOI: 10.2139/ssrn.227828