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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Format: | Policy Research Working Paper |
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World Bank, Washington, DC
2014
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Online Access: | http://documents.worldbank.org/curated/en/2001/12/1660254/international-evidence-value-product-geographic-diversity http://hdl.handle.net/10986/19407 |
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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 |
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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 |