International Evidence on the Value of Product and Geographic Diversity

International Evidence on the Value of Product and Geographic Diversity

The author examines the effect of product and geographic diversification on firm value for a sample of 1,914 corporations in 18 countries. His results indicate that both product and geographic diversification destroy value at high levels of diversi...

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Bibliographic Details
Main Author: Laeven, Luc
Format: Policy Research Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2014
Subjects:
AGENCY PROBLEMS
ASSETS
CAPITAL MARKETS
COMPANY
COMPARATIVE ADVANTAGE
CONGLOMERATE MERGERS
CONGLOMERATES
CORPORATE FINANCE
CORPORATE GOVERNANCE
CORPORATE OWNERSHIP
CORPORATE VALUE
CORPORATION
CORPORATIONS
DEBT
DIVERSIFICATION
ECONOMIC THEORY
ECONOMIES OF SCOPE
EFFICIENCY OF CAPITAL
EXPECTED RETURNS
EXPENDITURES
FINANCIAL CRISIS
FINANCIAL SECTOR
FIRM SIZE
FIRMS
FOREIGN SALES
GLOBAL CAPITAL
HUMAN CAPITAL
MERGERS
PRIVATE COMPANIES
PROFITABILITY
REGRESSION ANALYSIS
SHAREHOLDERS
THEORY OF THE FIRM
VALUATION
Online Access:http://documents.worldbank.org/curated/en/2001/12/1660254/international-evidence-value-product-geographic-diversity
http://hdl.handle.net/10986/19407
id okr-10986-19407
recordtype oai_dc
spelling okr-10986-194072021-04-23T14:03:42Z International Evidence on the Value of Product and Geographic Diversity Laeven, Luc AGENCY PROBLEMS ASSETS CAPITAL MARKETS COMPANY COMPARATIVE ADVANTAGE CONGLOMERATE MERGERS CONGLOMERATES CORPORATE FINANCE CORPORATE GOVERNANCE CORPORATE OWNERSHIP CORPORATE VALUE CORPORATION CORPORATIONS DEBT DIVERSIFICATION ECONOMIC THEORY ECONOMIES OF SCOPE EFFICIENCY OF CAPITAL EXPECTED RETURNS EXPENDITURES FINANCIAL CRISIS FINANCIAL SECTOR FIRM SIZE FIRMS FOREIGN SALES GLOBAL CAPITAL HUMAN CAPITAL MERGERS PRIVATE COMPANIES PROFITABILITY REGRESSION ANALYSIS SHAREHOLDERS THEORY OF THE FIRM VALUATION The author examines the effect of product and geographic diversification on firm value for a sample of 1,914 corporations in 18 countries. His results indicate that both product and geographic diversification destroy value at high levels of diversification, suggesting that agency and influence costs arising from the increased complexity outweigh the benefits of diversification at high levels. Geographic diversification is valuable at low levels, however. The author finds that insider ownership is associated with less diversification, across both product and geographic segments, suggesting that insiders view corporate diversification as value destroying. 2014-08-15T20:09:12Z 2014-08-15T20:09:12Z 2001-12 http://documents.worldbank.org/curated/en/2001/12/1660254/international-evidence-value-product-geographic-diversity http://hdl.handle.net/10986/19407 English en_US Policy Research Working Paper;No. 2729 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic AGENCY PROBLEMS
ASSETS
CAPITAL MARKETS
COMPANY
COMPARATIVE ADVANTAGE
CONGLOMERATE MERGERS
CONGLOMERATES
CORPORATE FINANCE
CORPORATE GOVERNANCE
CORPORATE OWNERSHIP
CORPORATE VALUE
CORPORATION
CORPORATIONS
DEBT
DIVERSIFICATION
ECONOMIC THEORY
ECONOMIES OF SCOPE
EFFICIENCY OF CAPITAL
EXPECTED RETURNS
EXPENDITURES
FINANCIAL CRISIS
FINANCIAL SECTOR
FIRM SIZE
FIRMS
FOREIGN SALES
GLOBAL CAPITAL
HUMAN CAPITAL
MERGERS
PRIVATE COMPANIES
PROFITABILITY
REGRESSION ANALYSIS
SHAREHOLDERS
THEORY OF THE FIRM
VALUATION
spellingShingle AGENCY PROBLEMS
ASSETS
CAPITAL MARKETS
COMPANY
COMPARATIVE ADVANTAGE
CONGLOMERATE MERGERS
CONGLOMERATES
CORPORATE FINANCE
CORPORATE GOVERNANCE
CORPORATE OWNERSHIP
CORPORATE VALUE
CORPORATION
CORPORATIONS
DEBT
DIVERSIFICATION
ECONOMIC THEORY
ECONOMIES OF SCOPE
EFFICIENCY OF CAPITAL
EXPECTED RETURNS
EXPENDITURES
FINANCIAL CRISIS
FINANCIAL SECTOR
FIRM SIZE
FIRMS
FOREIGN SALES
GLOBAL CAPITAL
HUMAN CAPITAL
MERGERS
PRIVATE COMPANIES
PROFITABILITY
REGRESSION ANALYSIS
SHAREHOLDERS
THEORY OF THE FIRM
VALUATION
Laeven, Luc
International Evidence on the Value of Product and Geographic Diversity
relation Policy Research Working Paper;No. 2729
description The author examines the effect of product and geographic diversification on firm value for a sample of 1,914 corporations in 18 countries. His results indicate that both product and geographic diversification destroy value at high levels of diversification, suggesting that agency and influence costs arising from the increased complexity outweigh the benefits of diversification at high levels. Geographic diversification is valuable at low levels, however. The author finds that insider ownership is associated with less diversification, across both product and geographic segments, suggesting that insiders view corporate diversification as value destroying.
format Publications & Research :: Policy Research Working Paper
author Laeven, Luc
author_facet Laeven, Luc
author_sort Laeven, Luc
title International Evidence on the Value of Product and Geographic Diversity
title_short International Evidence on the Value of Product and Geographic Diversity
title_full International Evidence on the Value of Product and Geographic Diversity
title_fullStr International Evidence on the Value of Product and Geographic Diversity
title_full_unstemmed International Evidence on the Value of Product and Geographic Diversity
title_sort international evidence on the value of product and geographic diversity
publisher World Bank, Washington, DC
publishDate 2014
url http://documents.worldbank.org/curated/en/2001/12/1660254/international-evidence-value-product-geographic-diversity
http://hdl.handle.net/10986/19407
_version_ 1764439788267503616

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