Does Diversification Destroy Firm Value? - Trade-off between Liquidity Premium and Cross-subsidization
|關鍵字:||多角化;流動性溢酬;交叉補貼效果;Diversification;liquidity premium;Cross-subsidization effect|
Value destruction by diversified firms relative to their focused competitors has been widely studied by prior literatures. This discount effect has been ascribed to many factors; among the most prominent of these explanations is the cross-subsidization effect between divisions resulted in diversified organizational form. However, the value-added effect of liquidity premium has been neglected by previous studies of corporate diversification. In our studies, we use data in the three main security exchanges in the United States, which are NYSE, Amex and NASDAQ in 2005 to 2010 for examining this contention. Our key finding is that higher level of liquidity premium mitigates diversification discount effect on firm value.
|Appears in Collections:||Thesis|
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