Firm diversification and asymmetric information: evidence from analysts' forecasts and earnings announcements

• 成果类型: Article
• 署名作者: Thomas, S
• 署名单位: Pennsylvania Commonwealth System of Higher Education (PCSHE); University of Pittsburgh
• 刊物名称: JOURNAL OF FINANCIAL ECONOMICS
• ISSN/ISSBN: 0304-405X
• DOI: 10.1016/S0304-405X(02)00129-0
• 发表日期: 2002
• 页码: 373-396
• 关键词: transparency; diversification; focus; asymmetric information; corporate structure

摘要

Managers frequently cite the desire to mitigate asymmetric information as a motivation for increasing firm focus. The information benefits of focus appear relevant for the subset of firms that actually increase their focus; however, the relevance of focus-related information benefits for the population of diversified firms is an open question. This paper examines the relation between corporate diversification and asymmetric information proxies derived from analysts' forecasts and abnormal returns associated with earnings announcements. I find that greater diversification is not associated with increased asymmetric information. These results call into question the notion that corporate diversification strictly exacerbates information problems. (C) 2002 Published by Elsevier Science B.V.