Diversification and heterogeneity of investor beliefs
Author
Abstract
Suggested Citation
DOI: 10.1016/j.jbankfin.2013.04.028
Download full text from publisher
As the access to this document is restricted, you may want to search for a different version of it.
References listed on IDEAS
- Andrei Shleifer & Robert W. Vishny, 1991.
"Takeovers in the '60s and the '80s: Evidence and implications,"
Strategic Management Journal, Wiley Blackwell, vol. 12(S2), pages 51-59, December.
- Shleifer, Andrei & Vishny, Robert W., 1991. "Takeovers in the '60s and the '80s: Evidence and Implications," Scholarly Articles 10498058, Harvard University Department of Economics.
- Miller, Edward M, 1977. "Risk, Uncertainty, and Divergence of Opinion," Journal of Finance, American Finance Association, vol. 32(4), pages 1151-1168, September.
- Matsusaka, John G. & Nanda, Vikram, 2002. "Internal Capital Markets and Corporate Refocusing," Journal of Financial Intermediation, Elsevier, vol. 11(2), pages 176-211, April.
- Jose A. Scheinkman & Wei Xiong, 2003. "Overconfidence and Speculative Bubbles," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1183-1219, December.
- Lang, Larry H P & Stulz, Rene M, 1994.
"Tobin's q, Corporate Diversification, and Firm Performance,"
Journal of Political Economy, University of Chicago Press, vol. 102(6), pages 1248-1280, December.
- Larry H.P. Lang & Rene M. Stulz, 1993. "Tobin's Q, Corporate Diversification and Firm Performance," NBER Working Papers 4376, National Bureau of Economic Research, Inc.
- Karl B. Diether & Christopher J. Malloy & Anna Scherbina, 2002. "Differences of Opinion and the Cross Section of Stock Returns," Journal of Finance, American Finance Association, vol. 57(5), pages 2113-2141, October.
- Clarke, Jonathan E. & Fee, C. Edward & Thomas, Shawn, 2004. "Corporate diversification and asymmetric information: evidence from stock market trading characteristics," Journal of Corporate Finance, Elsevier, vol. 10(1), pages 105-129, January.
- H. Henry Cao & Hui Ou-Yang, 2009. "Differences of Opinion of Public Information and Speculative Trading in Stocks and Options," The Review of Financial Studies, Society for Financial Studies, vol. 22(1), pages 299-335, January.
- Krishnaswami, Sudha & Subramaniam, Venkat, 1999. "Information asymmetry, valuation, and the corporate spin-off decision," Journal of Financial Economics, Elsevier, vol. 53(1), pages 73-112, July.
- Sara B. Moeller & Frederik P. Schlingemann & René M. Stulz, 2007. "How Do Diversity of Opinion and Information Asymmetry Affect Acquirer Returns?," The Review of Financial Studies, Society for Financial Studies, vol. 20(6), pages 2047-2078, November.
- Harrison Hong & Jeremy C. Stein, 2003. "Differences of Opinion, Short-Sales Constraints, and Market Crashes," The Review of Financial Studies, Society for Financial Studies, vol. 16(2), pages 487-525.
- Raghuram Rajan & Henri Servaes & Luigi Zingales, 2000.
"The Cost of Diversity: The Diversification Discount and Inefficient Investment,"
Journal of Finance, American Finance Association, vol. 55(1), pages 35-80, February.
- Raghuram Rajan & Henry Servaes & Luigi Zingales, "undated". "The Cost of Diversity: The Diversification Discount and Inefficient Investment," CRSP working papers 463, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Raghuram Rajan & Henri Servaes & Luigi Zingales, "undated". "The Cost of Diversity: The Diversification Discount and Inefficient Investment," CRSP working papers 357, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
- Raghuram Rajan & Henri Servaes & Luigi Zingales, 1998. "The Cost of Diversity: The Diversification Discount and Inefficient Investment," NBER Working Papers 6368, National Bureau of Economic Research, Inc.
- Rajan, Raghuram G & Servaes, Henri & Zingales, Luigi, 1998. "The Cost of Diversity: The Diversification Discount and Inefficient Investment," CEPR Discussion Papers 1801, C.E.P.R. Discussion Papers.
- Stephen Morris, 1996.
"Speculative Investor Behavior and Learning,"
The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(4), pages 1111-1133.
- Stephen Morris, "undated". "Speculative Investor Behavior and Learning," Penn CARESS Working Papers d12f7936881423171f6589501, Penn Economics Department.
- Stephen Morris, "undated". ""Speculative Investor Behavior and Learning''," CARESS Working Papres 95-13, University of Pennsylvania Center for Analytic Research and Economics in the Social Sciences.
- Stephen D. Morris, 1996. "Speculative investor behavior and learning," Working Papers 96-5, Federal Reserve Bank of Philadelphia.
- Heckman, James, 2013.
"Sample selection bias as a specification error,"
Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
- Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-161, January.
- H. Henry Cao & Tan Wang & Harold H. Zhang, 2005. "Model Uncertainty, Limited Market Participation, and Asset Prices," The Review of Financial Studies, Society for Financial Studies, vol. 18(4), pages 1219-1251.
- Chen, Joseph & Hong, Harrison & Stein, Jeremy C., 2002.
"Breadth of ownership and stock returns,"
Journal of Financial Economics, Elsevier, vol. 66(2-3), pages 171-205.
- Joseph Chen & Harrison Hong & Jeremy C. Stein, 2001. "Breadth of Ownership and Stock Returns," NBER Working Papers 8151, National Bureau of Economic Research, Inc.
- Harris, Milton & Raviv, Artur, 1993. "Differences of Opinion Make a Horse Race," The Review of Financial Studies, Society for Financial Studies, vol. 6(3), pages 473-506.
- Harrison Hong & José Scheinkman & Wei Xiong, 2006.
"Asset Float and Speculative Bubbles,"
Journal of Finance, American Finance Association, vol. 61(3), pages 1073-1117, June.
- Harrison Hong & Jose Scheinkman & Wei Xiong, 2005. "Asset Float and Speculative Bubbles," NBER Working Papers 11367, National Bureau of Economic Research, Inc.
- An Yan, 2006. "Value of Conglomerates and Capital Market Conditions," Financial Management, Financial Management Association International, vol. 35(4), pages 5-30, December.
- Alexander Ljungqvist & Christopher Malloy & Felicia Marston, 2009. "Rewriting History," Journal of Finance, American Finance Association, vol. 64(4), pages 1935-1960, August.
- Jose Manuel Campa & Simi Kedia, 2002.
"Explaining the Diversification Discount,"
Journal of Finance, American Finance Association, vol. 57(4), pages 1731-1762, August.
- José Manuel Campa & Simi Kedia, 1999. "Explaining the Diversification Discount," Working Papers 99-06, New York University, Leonard N. Stern School of Business, Department of Economics.
- Campa, Jose M. & Kedia, Simi, 2000. "Explaining the diversification discount," IESE Research Papers D/424, IESE Business School.
- Hadlock, Charles J & Ryngaert, Michael & Thomas, Shawn, 2001. "Corporate Structure and Equity Offerings: Are There Benefits to Diversification?," The Journal of Business, University of Chicago Press, vol. 74(4), pages 613-635, October.
- Toni M. Whited, 2001. "Is It Inefficient Investment that Causes the Diversification Discount?," Journal of Finance, American Finance Association, vol. 56(5), pages 1667-1691, October.
- Fama, Eugene F & MacBeth, James D, 1973. "Risk, Return, and Equilibrium: Empirical Tests," Journal of Political Economy, University of Chicago Press, vol. 81(3), pages 607-636, May-June.
- Servaes, Henri, 1996. "The Value of Diversification during the Conglomerate Merger Wave," Journal of Finance, American Finance Association, vol. 51(4), pages 1201-1225, September.
- David S. Scharfstein & Jeremy C. Stein, 2000.
"The Dark Side of Internal Capital Markets: Divisional Rent‐Seeking and Inefficient Investment,"
Journal of Finance, American Finance Association, vol. 55(6), pages 2537-2564, December.
- David S. Scharfstein & Jeremy C. Stein, 1997. "The Dark Side of Internal Capital Markets: Divisional Rent-Seeking and Inefficient Investment," NBER Working Papers 5969, National Bureau of Economic Research, Inc.
- Amar Bhide, 1990. "Reversing Corporate Diversification," Journal of Applied Corporate Finance, Morgan Stanley, vol. 3(2), pages 70-81, June.
- Mayshar, Joram, 1983. "On Divergence of Opinion and Imperfections in Capital Markets," American Economic Review, American Economic Association, vol. 73(1), pages 114-128, March.
- John R. Graham & Michael L. Lemmon & Jack G. Wolf, 2002. "Does Corporate Diversification Destroy Value?," Journal of Finance, American Finance Association, vol. 57(2), pages 695-720, April.
- An Yan, 2006. "Value of Conglomerates and Capital Market Conditions," Financial Management, Financial Management Association, vol. 35(4), Winter.
- Charles M.C. Lee & Bhaskaran Swaminathan, 2000. "Price Momentum and Trading Volume," Journal of Finance, American Finance Association, vol. 55(5), pages 2017-2069, October.
- J. Michael Harrison & David M. Kreps, 1978. "Speculative Investor Behavior in a Stock Market with Heterogeneous Expectations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 92(2), pages 323-336.
- Berger, Philip G. & Ofek, Eli, 1995. "Diversification's effect on firm value," Journal of Financial Economics, Elsevier, vol. 37(1), pages 39-65, January.
Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
Cited by:
- Raffestin, Louis, 2014. "Diversification and systemic risk," Journal of Banking & Finance, Elsevier, vol. 46(C), pages 85-106.
- Chemmanur, Thomas & Yan, An, 2017. "Product market advertising, heterogeneous beliefs, and the long-run performance of initial public offerings," Journal of Corporate Finance, Elsevier, vol. 46(C), pages 1-24.
- Samdani, Taufique, 2024. "Disclosure rules, controlling shareholders, and trading activity in the new issues market," Journal of Banking & Finance, Elsevier, vol. 163(C).
Most related items
These are the items that most often cite the same works as this one and are cited by the same works as this one.- Yan, An & Yang, Zaihui & Jiao, Jie, 2010. "Conglomerate investment under various capital market conditions," Journal of Banking & Finance, Elsevier, vol. 34(1), pages 103-115, January.
- Stefan Erdorf & Thomas Hartmann-Wendels & Nicolas Heinrichs & Michael Matz, 2013. "Corporate diversification and firm value: a survey of recent literature," Financial Markets and Portfolio Management, Springer;Swiss Society for Financial Market Research, vol. 27(2), pages 187-215, June.
- Cline, Brandon N. & Garner, Jacqueline L. & Yore, Adam S., 2014. "Exploitation of the internal capital market and the avoidance of outside monitoring," Journal of Corporate Finance, Elsevier, vol. 25(C), pages 234-250.
- Peng, Emma Y. & Yan, An & Yan, Meng, 2016. "Accounting accruals, heterogeneous investor beliefs, and stock returns," Journal of Financial Stability, Elsevier, vol. 24(C), pages 88-103.
- Chemmanur, Thomas & Yan, An, 2017. "Product market advertising, heterogeneous beliefs, and the long-run performance of initial public offerings," Journal of Corporate Finance, Elsevier, vol. 46(C), pages 1-24.
- Chen, Lin & Qin, Lu & Zhu, Hongquan, 2015. "Opinion divergence, unexpected trading volume and stock returns: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 36(C), pages 119-127.
- Turan G. Bali & Andriy Bodnaruk & Anna Scherbina & Yi Tang, 2018. "Unusual News Flow and the Cross Section of Stock Returns," Management Science, INFORMS, vol. 64(9), pages 4137-4155, September.
- Qian, Xiaolin, 2014. "Small investor sentiment, differences of opinion and stock overvaluation," Journal of Financial Markets, Elsevier, vol. 19(C), pages 219-246.
- Wei Xiong, 2013. "Bubbles, Crises, and Heterogeneous Beliefs," NBER Working Papers 18905, National Bureau of Economic Research, Inc.
- Aivazian, Varouj A. & Qiu, Jiaping & Rahaman, Mohammad M., 2015. "Bank loan contracting and corporate diversification: Does organizational structure matter to lenders?," Journal of Financial Intermediation, Elsevier, vol. 24(2), pages 252-282.
- Nilakshi Borah & Liu Pan & Jung Chul Park & Nan Shao, 2018. "Does corporate diversification reduce value in high technology firms?," Review of Quantitative Finance and Accounting, Springer, vol. 51(3), pages 683-718, October.
- Jose Manuel Campa & Simi Kedia, 2002.
"Explaining the Diversification Discount,"
Journal of Finance, American Finance Association, vol. 57(4), pages 1731-1762, August.
- José Manuel Campa & Simi Kedia, 1999. "Explaining the Diversification Discount," Working Papers 99-06, New York University, Leonard N. Stern School of Business, Department of Economics.
- Campa, Jose M. & Kedia, Simi, 2000. "Explaining the diversification discount," IESE Research Papers D/424, IESE Business School.
- Lin, J. Barry & Pantzalis, Christos & Park, Jung Chul, 2007. "Corporate use of derivatives and excess value of diversification," Journal of Banking & Finance, Elsevier, vol. 31(3), pages 889-913, March.
- Klein, Peter G, 2001.
"Were the Acquisitive Conglomerates Inefficient?,"
RAND Journal of Economics, The RAND Corporation, vol. 32(4), pages 745-761, Winter.
- Peter G. Klein, 1997. "Were the Acquisitive Conglomerates Inefficient?," Industrial Organization 9711001, University Library of Munich, Germany, revised 04 Feb 2002.
- Oliver Boguth & Ran Duchin & Mikhail Simutin, 2022. "Dissecting Conglomerate Valuations," Journal of Finance, American Finance Association, vol. 77(2), pages 1097-1131, April.
- An Yan, 2006. "Value of Conglomerates and Capital Market Conditions," Financial Management, Financial Management Association International, vol. 35(4), pages 5-30, December.
- Hoechle, Daniel & Schmid, Markus & Walter, Ingo & Yermack, David, 2012. "How much of the diversification discount can be explained by poor corporate governance?," Journal of Financial Economics, Elsevier, vol. 103(1), pages 41-60.
- Vojislav Maksimovic & Gordon Phillips, 2002. "Do Conglomerate Firms Allocate Resources Inefficiently Across Industries? Theory and Evidence," Journal of Finance, American Finance Association, vol. 57(2), pages 721-767, April.
- Ling Cen & K. C. John Wei & Liyan Yang, 2017. "Disagreement, Underreaction, and Stock Returns," Management Science, INFORMS, vol. 63(4), pages 1214-1231, April.
- Chou, Ting-Kai & Cheng, Jia-Chi, 2012. "Credit ratings and excess value of diversification," Journal of Empirical Finance, Elsevier, vol. 19(2), pages 266-281.
More about this item
Keywords
Diversification; Heterogeneity of investor beliefs; Excess value;All these keywords.
JEL classification:
- G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
- G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
Statistics
Access and download statisticsCorrections
All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbfina:v:37:y:2013:i:9:p:3435-3453. See general information about how to correct material in RePEc.
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbf .
Please note that corrections may take a couple of weeks to filter through the various RePEc services.