Earticle

초록

영어

This paper highlights the interactions of sales growth with diversification strategies and their joint effects on firm value. Employing firm-level data for 39 countries, we report that firms diversify mainly to cope with their poor sales growth and/or slow growth in their core industries. Consistent with evidence in the literature, we confirm a diversification discount on average for our sample firms. After considering joint changes in sales growth and diversification, however, we uncover the existence of a diversification premium in two situations: (1) when firms expand diversification with their sales growing faster than industry peers; and (2) when firms reduce diversification with declining sales. We further find that the effects of the interactions between sales growth and diversification activity on firm value are more pronounced for developed market firms than for emerging market firms. Overall, our results strongly suggest that despite the negative diversification effect on average, a diversification premium is viable if a firm’s diversification strategy is properly aligned with its business situations such as sales growth.

목차

Abstract
 1. Introduction
 2. Literature Review and Development of Testing Hypotheses
  2.1. Related studies
  2.2. Development of testing hypotheses
 3. Empirical Design
  3.1. Measurement of diversification index
  3.2. Analysis of determinants of corporate diversification
  3.3. Analysis of the effect of corporate diversification on firm value
  3.4. Analysis of the effect of diversification on firm value by sales growth quantiles
  3.5. Analysis of the diversification effect by joint changes in sales growth and diversification
  3.6. Data
 4. Empirical Results
  4.1. Summary statistics of key variables
  4.2. Distribution of diversification index by sales growth
  4.3. Pearson correlation coefficients
  4.4. Regression results on the determinants of diversification index
  4.5. Regression results on the diversification effect by considering sales growth
  4.6. Regression results on the diversification effect by sales growth quantiles
  4.7. Regression results of the diversification effect by core-industry sales growth quantiles
  4.8. Regression results on the diversification effect by types of diversification
  4.9. Robustness tests
 5. Conclusion
 References

키워드

저자

• Taek Ho Kwon [ School of Business, Chungnam National University, Daejon, Korea ]
• Sung C. Bae [ Department of Finance, College of Business, Bowling Green State University, Bowling Green ] Corresponding author
• Soon Hong Park [ School of Business, Chungnam National University, Daejon, Korea ]

참고문헌

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간행물

표지보기 관심저널 등록

• 간행물명

  한국재무학회 학술대회

• 간기

  부정기

• 수록기간

  2006~2024

• 십진분류

  KDC 325 DDC 330