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Both Sides of Corporate Diversification: The Value Impacts of Geographic and Industrial Diversification / Gordon M. Bodnar, Charles Tang, Joseph Weintrop.
- Format:
- Book
- Author/Creator:
- Bodnar, Gordon M.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w6224.
- NBER working paper series no. w6224
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Both Sides of Corporate Diversification
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 1997.
- Summary:
- This paper examines the effect of geographic and industrial diversification on firm value for a sample of over 20,000 firm-year observations of U.S. corporations from 1987-1993. Our" multivariate tests indicate the average value of a firm with international operations is 2.2% higher than comparable domestic single activity firms, while the average value of a firm with activities in multiple industrial segments is 5.4% lower than a portfolio of comparable focused domestic firms in similar activities. More importantly, we demonstrate that failure to control simultaneously for both dimensions of diversification results in over-estimation of the negative value impact of industrial diversification, but has little impact on estimates of the positive value impact of geographic diversification.
- Notes:
- Print version record
- October 1997.
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