Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
1000098 | The Spanish Review of Financial Economics | 2014 | 10 Pages |
Abstract
This paper provides empirical evidence of how a firm's growth opportunities shape the diversification–value relationship on a sample of U.S. companies between 1998 and 2010. Our findings suggest that the negative relationship between diversification and a firm's value may reverse at high levels of diversification, and that such a U-form diversification–value relation is partly mediated by a firm's growth opportunities. Results are robust to various model specifications and after controlling for endogenous self-selection of the diversification decision.
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Authors
Pablo de Andrés, Gabriel de la Fuente, Pilar Velasco,