Uncertainty about average profitability and the diversification discount

• 成果类型: Article
• 署名作者: Hund, John; Monk, Donald; Tice, Sheri
• 署名单位: Tulane University; Rice University; U.S. Securities & Exchange Commission (SEC)
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/j.jfineco.2010.02.006
• 发表日期: 2010
• 页码: 463-484
• 关键词: DIVERSIFICATION DISCOUNT; Rational learning models; internal capital markets

摘要

The diversification discount (multiple segment firm value below the value imputed using single segment firm multiples) is commonly thought to be generated by agency problems, a lack of transparency, or lackluster future prospects for diversified firms. If multiple segment firms have lower uncertainty about mean profitability than single segment firms, rational learning about mean profitability provides an alternative explanation for the diversification discount that does not rely on suboptimal managerial decisions or a poor firm outlook. Empirical tests which examine changes in firm value across the business cycle and idiosyncratic volatility are consistent with lower uncertainty about mean profitability for multiple segment firms. (C) 2010 Elsevier B.V. All rights reserved.