Do conglomerate firms allocate resources inefficiently across industries? Theory and evidence

• 成果类型: Article
• 署名作者: Maksimovic, V; Phillips, G
• 署名单位: University System of Maryland; University of Maryland College Park
• 刊物名称: JOURNAL OF FINANCE
• ISSN/ISSBN: 0022-1082
• DOI: 10.1111/1540-6261.00440
• 发表日期: 2002
• 页码: 721-767
• 关键词: internal capital-markets; AGENCY COSTS; cash flow; INVESTMENT; diversification; equilibrium; performance; decisions; BEHAVIOR; GROWTH

摘要

We develop a profit - maximizing neoclassical model of optimal firm size and growth across different industries based on differences in industry fundamentals and firm productivity. In the model, a conglomerate discount is consistent with profit maximization. The model predicts how conglomerate firms will allocate resources across divisions over the business cycle and how their responses to industry shocks will differ from those of single-segment firms. Using plant level data, we find that growth and investment of conglomerate and single-segment firms is related to fundamental industry factors and individual segment level productivity. The majority of conglomerate firms exhibit growth across industry segments that is consistent with optimal behavior.