Download or read book Essays on Firm Diversification written by Xuejing Xing and published by . This book was released on 2003 with total page 228 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation focuses on firm diversification. In particular, this dissertation investigates the valuation effects and the risk effects of corporate diversification. The dissertation consists of two essays. Essay 1, "The diversification discount and growth opportunities: Another look at the effect of corporate diversification on firm value," investigates whether corporate diversification reduces firm value. Previous studies establish a diversification discount by comparing business segments of diversified firms with stand-alone industry medians (means). However, business segments in diversified firms and the median (mean) stand-alone firms in the same industry may not be comparable because they may have different growth opportunities, which usually constitute a significant portion of firm value. Consequently, the observed diversification discount may result from the inappropriate use of benchmarks. In this essay, we use individual stand-alone industry firms of similar growth opportunities as benchmarks for business segments in diversified firms. Using a sample of 218 diversifying firms covering the period of 1994-2000, we find that when business segments in diversifying firms are compared with their stand-alone industry counterparts of comparable growth opportunities, the diversification discount still exists. We thus provide evidence suggesting that corporate diversification does destroy firm value, which is consistent with Lang and Stulz (1994), Berger and Ofek (1995, 1999), and Lamont and Polk (2002). Essay 2, "Does corporate diversification reduce firm risk? An empirical analysis," investigates whether corporate diversification reduces firm risk. While it has been argued and generally assumed that corporate diversification reduces firm risk, there is a paucity of empirical evidence concerning the association between corporate diversification and lower firm risk. Given the observed puzzles associated with corporate diversification, one should not take this association for granted without empirical evidence. In this essay, we empirically investigate the relationship between corporate diversification and firm risk using various risk measures including the variance of stock returns, systematic risk and firm-specific risk measures based both on the traditional single-factor market model and the Fama and French (1993) three-factor model, and time-varying risk estimates based on generalized autoregressive conditional heteroscedasticity (GARCH) estimations. Using a sample of 257 diversifying firms defined as firms that start with a single segment and then diversify at some point of time during the sample period of 1994-2000, we find that rather than reducing firm risk, corporate diversification typically increases the levels of firm risk, thereby rejecting the risk reduction hypothesis of firm diversification.

Download or read book Essays on Firm Diversification and Market Concentration written by Alan Jeffrey Daskin and published by . This book was released on 1983 with total page 370 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Corporate Diversification and Firm Value written by Tyson Brighton Mackey and published by . This book was released on 2006 with total page 97 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: This dissertation finds new evidence on the relationship between diversification and firm performance. In Chapter Two, theory and evidence are presented showing how empirical studies accounting for the endogeneity of the diversification decision must also account for a firm's alternative uses for its free cash flow. This chapter examines dividends and stock repurchases in tandem with the firm's diversification decision and finds that the factors that lead a firm to diversify also make it more likely to pay a dividend. Controlling for this relationship, the diversification premium found by recent research correcting for endogeneity turns back into a discount. In Chapter Three, consideration is given to the possibility that different firms can have differing results from diversification. Using a random parameters model, a distribution of firm-specific diversification effects is estimated, finding that, while diversification destroys value on average, it creates value for a quarter of firms. This chapter also hypothesizes that firms may have an optimal portfolio of businesses, and firms that are not creating value from diversification could potentially do so through by diversifying further. Through a series of hypothetical related and unrelated diversification scenarios, this chapter finds that almost half of the diversified firms who are not creating value through their past diversification efforts would create value from further related diversification; while very few of the firms that are currently creating value from diversification would create value from further diversification. After observing the heterogeneity across firms in the impact of diversification on firm performance, theory and evidence is presented on the source of this heterogeneity in Chapter Four. Using a Bayesian linear hierarchical model, firm-specific effects of diversification on firm performance are estimated as a function of firm attributes. The main finding is that the firm-specific resources that allow a firm to succeed in its original business, allow the firm to succeed through related diversification. Unsuccessful firms will not find success simply by finding a new market in which to compete.

Download or read book Essays on Corporate Diversification written by Dmitry Livdan and published by . This book was released on 2003 with total page 88 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Two Essays on Diversification Behavior in Family Firms written by Youyi Su and published by . This book was released on 2019 with total page 228 pages. Available in PDF, EPUB and Kindle. Book excerpt: Prior research shows that family firms are generally less likely to diversify, but it remains unclear which mode of diversification in terms of internal versus external diversification family firms are more likely to choose once they decide to diversify. Similarly, it is unclear which type of diversification in terms of product versus international diversification family firms are more likely to focus on in comparison to nonfamily firms. Based on insights drawn from the goals, governance, and resources framework, this dissertation investigates the modes/types of diversification in family and nonfamily firms, as well as among various types of family firms. Specifically, I propose that family firms will prefer internal to external diversification to a larger extent than nonfamily firms. I further propose the strength of preference for internal to external diversification is likely to vary among different types of family firms manifested in the level of family ownership, family participation in the top management team and board, and generation of family members owning and controlling the family firm. Likewise, I theorize that family firms would prefer product to international diversification to a larger extent than nonfamily firms and that the strength of preference for product diversification is likely to vary among different types of family firms. A sample of 573 firms drawn from the S&P 1500 index was used toexamine the difference between family and nonfamily firms, and 136 family firms to test the heterogeneity hypotheses. No significant differences were found between family and nonfamily firms in their relative choice on internal over external diversification (Essay 1) and product over international diversification (Essay 2). Consistent with my prediction, I found family representation in the top management team has a significantly positive effect on a firm's tendency to engage in product rather than international diversification. However, in both Essay1 and Essay 2, I did not find significant effects of the other heterogeneous variables on a family firm's tendency to engage in one mode/type of diversification over the other. A rationale for these non-significant relationships is provided. Contributions and implications of this study are also discussed.

Download or read book Essays in Corporate Diversification Market Efficiency and Allocation of Scarce Resources written by Richard Borghesi and published by . This book was released on 2004 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt: ABSTRACT: This dissertation is composed of three essays that address corporate diversification, market efficiency, and allocation of scarce financial resources. The analysis in chapter 2 examines the relationship between changes in firm organizational structure and fluctuations in market value. Organizational structure in this context is defined as the level of corporate diversification, and is measured as the dispersion of total firm sales among existing business segments. The speed and accuracy of the equities market's reaction to events such as corporate reorganization are tested in chapter 3. Finally, in chapter 4, we supplement our organizational structure analysis by examining managerial decision-making in an environment where resources are artificially bounded.

Download or read book Essays in Corporate Finance written by Lan Xu and published by . This book was released on 2013 with total page 123 pages. Available in PDF, EPUB and Kindle. Book excerpt: This dissertation includes three essays that study topics of diversification discount, corporate investment, and employee stock options. The first essay proposes and tests a novel view that the diversification discount is largely an acquisition discount. I find that the manner in which diversification is achieved, organically or through acquisitions, matters. The diversification discount narrows by 10% to 14% if I account for acquisitions in my broad sample. My narrow sample provides a cleaner setting to identify the impact of growth mode on the discount: firms diversifying through acquisitions experience a significant decline in excess value after becoming diversified, while firms of organic growth do not. When pooled together, the diversifying firms exhibit a value-change pattern which closely tracks that of the acquisitive-growth subsample. This pattern is robust to within-firm comparisons, regressions, and matching estimations. I investigate possible causes and conclude it is consistent with inefficient investment hypothesis. The second essay examines the competitive investments of firms after recession shocks. I show that firms' strategic investments during the recovery phase of the cyclical downturn induce a compositional shift in investments within industries and help explain the slow economic recovery, thus adding an additional layer of cost to recessions. The third essay explores an alternative signaling theory and tests its implications in the case of firms' voluntary expensing of employee stock options and I find strong empirical support.

Download or read book Three Essays on International Corporate Diversification and Mergers and Acquisitions written by Yee Jin Jang and published by . This book was released on 2013 with total page 209 pages. Available in PDF, EPUB and Kindle. Book excerpt: Abstract: In this dissertation, I explore how the organizational structure of firms impacts corporate financing and investment decisions. I focus on the geographic structure of firms across countries in the first and second essays and changes in boundaries of firms through acquisitions in the third essay.

Download or read book Two Essays on the Effect of Diversification on Firm written by 彭育薇 and published by . This book was released on 2010 with total page 118 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Corporate Diversification written by Xinlin Zhu and published by . This book was released on 2016 with total page pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in Corporate Diversification Information and Incentives written by Shlomith Dinah Zuta and published by . This book was released on 1998 with total page 286 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays in corporate diversification and refocusing strategies written by Bharathram Thothadri and published by . This book was released on 1999 with total page 0 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Market Efficiency and Corporate Diversification written by Fawzi J. Hyder and published by . This book was released on 2017 with total page 175 pages. Available in PDF, EPUB and Kindle. Book excerpt: In my first essay, I use additions to the S&P 500 index as a laboratory to investigate how the interaction between arbitrageurs and arbitrage risk affects security prices. I find that the price effect is strong when there is high arbitrage risk (as measured by the lack of close substitutes) and low presence of arbitrageurs (as measured by low ownership by active institutions). Furthermore, a strong presence of arbitrageurs moderates the effect of arbitrage risk on the post-addition price reaction of added stocks. I also find a significant decrease in arbitrageurs' ownership in the added stocks post addition. More importantly, this decrease is accompanied by a significant increase in arbitrageurs' ownership in the added stocks' close substitutes.

Download or read book Three Essays on Innovation and Entrepreneurship written by Sang Kyun Kim (Ph. D.) and published by . This book was released on 2010 with total page 118 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Three Essays on Business Groups and Diversification written by Ahmet Melih Kũllũ and published by . This book was released on 2012 with total page 412 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book Essays on Internal Control Deficiency and Firm s Diversification written by Nontawan Yomchinda and published by . This book was released on 2012 with total page 208 pages. Available in PDF, EPUB and Kindle. Book excerpt:

Download or read book The Growth of Firms Middle East Oil and Other Essays written by Edith Penrose and published by Routledge. This book was released on 2019-04-18 with total page 383 pages. Available in PDF, EPUB and Kindle. Book excerpt: Published in 1971: At first glance it might seem that the three subjects dealt with in the essays written over the last twenty years and now collected in this volume could hardly be more diverse, beginning with the growth of the firm and moving from the international petroleum industry to the Middle East generally. Oddly enough, however, these subjects are connected by the same type of historical logic that characterizes the diversification of an industrial firm: the logic in the simple principle that one thing leads to another.