This paper investigates how the value of diversification is shaped by various levels and types of diversification. Consistent with the value-destroying expectation, we find a reduction in the value of the diversified companies; however, there is a non-linear relation between diversification and value, giving rise to an optimal level of diversification. Moreover, our results highlight that related diversification has a negative effect, while unrelated diversification is a value-creating strategy.
Multibusiness firms and performance in Italy. What role does relatedness play?
LA ROCCA, Maurizio
;
2018-01-01
Abstract
This paper investigates how the value of diversification is shaped by various levels and types of diversification. Consistent with the value-destroying expectation, we find a reduction in the value of the diversified companies; however, there is a non-linear relation between diversification and value, giving rise to an optimal level of diversification. Moreover, our results highlight that related diversification has a negative effect, while unrelated diversification is a value-creating strategy.File in questo prodotto:
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