There is little consensus on the corporate diversification-efficiency relationship in the diversification literature. The study aims to contribute to the literature by looking jointly at two dimensions of corporate diversification as product diversification and international diversification and the relationship between them. The results show negative relationship between product diversification...

there is little consensus on the corporate diversification-efficiency relationship in the diversification literature. the study aims to contribute to the literature by looking jointly at two dimensions of corporate diversification as product diversification and international diversification and the relationship between them. the results show negative relationship between product diversification...

there is little consensus on the corporate diversification-efficiency relationship in the diversification literature. according to the corporate diversification, firms have a tendency to get more market share with diversifying in the local segment or in the international market. theoretically, a contradictory exists between the profitable strategy and the value reducing strategy in the diversif...

There is little consensus on the corporate diversification-efficiency relationship in the diversification literature. According to the corporate diversification, firms have a tendency to get more market share with diversifying in the local segment or in the international market. Theoretically, a contradictory exists between the profitable strategy and the value reducing strategy in the diversif...

We examine how corporate innovations influence firms’ industrial diversification decisions and how innovation-related diversification affects firm value. Our fixed effect, 2SLS and GMM models consistently show that corporate innovations lead to greater extent of diversification. The 2SLS model uses the staggered implementation of U.S. state-level R&D tax credits as an instrumental variable for ...

Using a database of more than 8,000 companies from 35 countries, we find that the value of corporate diversification is related to the level of capital market development, integration, and legal systems. Among high-income countries, where capital markets are well developed and integrated, we find a significant diversification discount. By contrast, for the lower income and segmented countries, ...

Available online 26 November 2014

We show that the value of corporate diversification increased during the 2007–2009 financial crisis. Diversification gave firms both financing and investment advantages. First, conglomerates became significantly more leveraged relative to comparable focused firms. Second, conglomerates’ access to internal capital markets became more valuable not just because external capital markets became more...

Firms undertake a variety of actions to reduce risk through diversification, including entering diverse lines of business, taking on project partners, and maintaining portfolios of risky projects such as R&D or natural resource exploration. By a well-known argument, securities holders do not directly benefit from risk-reducing corporate diversification when they can replicate this diversificati...