Journal of Financial Economics
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Выпуски:
Опубликовано на портале: 03-10-2003
Philip G. Berger, Eli Ofek
Journal of Financial Economics.
1995.
Vol. 37.
No. 1.
P. 39-65.
In this article estimates diversification's effect on firm value by imputing stand-alone
values
for individual business segments. Comparing the sum of these stand-alone values to
the firm's actual value implies a 13% to 15% average value loss from diversification
during 1986-1991. The value loss is smaller when the segments of the diversified
firm are in the same two-digit SIC code. We find that overinvestment and cross-subsidization
contribute to the value loss. The loss is reduced modestly by tax benefits of diversification.
