Divisional diversity and the conglomerate discount: evidence from spinoffs

• 成果类型: Article
• 署名作者: Burch, TR; Nanda, V
• 署名单位: University of Miami; University of Michigan System; University of Michigan
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(03)00142-9
• 发表日期: 2003
• 页码: 69-98
• 关键词: diversified firms; internal capital markets; spinoff; DIVERSIFICATION DISCOUNT

摘要

Existing literature argues that disparity in investment opportunities within diversified firms can erode firm value. We investigate the diversity cost hypothesis of spinoffs by using post-spinoff data to (1) reconstruct the diversified firm after the spinoff and assess the aggregate improvement in value and (2) relate any value improvements to changes in diversity. We find that improvements in aggregate value depend significantly on changes in both a direct measure of diversity and measures based on industry proxies. We conclude that diversification discounts at least partially reflect a value loss due to the diversified nature of the firm itself, rather than selection bias or measurement error. (C) 2003 Elsevier B.V. All rights reserved.