How much of the diversification discount can be explained by poor corporate governance?

• 成果类型: Article
• 署名作者: Hoechle, Daniel; Schmid, Markus; Walter, Ingo; Yermack, David
• 署名单位: University of Mannheim; University of Basel; New York University
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2011.03.025
• 发表日期: 2012
• 页码: 41-60
• 关键词: Organizational structure; diversification; Firm valuation; corporate governance

摘要

We investigate whether the diversification discount occurs partly as an artifact of poor corporate governance. In panel data models, we find that the discount narrows by 16% to 21% when we add governance variables as regression controls. We also estimate Heckman selection models that account for the endogeneity of diversification and dynamic panel generalized method of moments models that account for the endogeneity of both diversification and governance. We find that the diversification discount persists even with these controls for endogeneity. However, in selection models the discount disappears entirely when we introduce governance variables in the second stage, and in dynamic panel GMM models the discount narrows by 37% when we include governance variables. (C) 2011 Elsevier B.V. All rights reserved.