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The long-run performance of diversifying firms

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  • David Hyland

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  • David Hyland, 2008. "The long-run performance of diversifying firms," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 32(3), pages 294-310, July.
    • Handle: RePEc:spr:jecfin:v:32:y:2008:i:3:p:294-310
    DOI: 10.1007/s12197-007-9001-7
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    References listed on IDEAS

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    1. Mitchell, Mark L & Stafford, Erik, 2000. "Managerial Decisions and Long-Term Stock Price Performance," The Journal of Business, University of Chicago Press, vol. 73(3), pages 287-329, July.
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    3. Morck, Randall & Shleifer, Andrei & Vishny, Robert W, 1990. "Do Managerial Objectives Drive Bad Acquisitions?," Journal of Finance, American Finance Association, vol. 45(1), pages 31-48, March.
    4. Jose Manuel Campa & Simi Kedia, 2002. "Explaining the Diversification Discount," Journal of Finance, American Finance Association, vol. 57(4), pages 1731-1762, August.
    5. David Hyland & J David Diltz, 2002. "Why Firms Diversify: An Empirical Examination," Financial Management, Financial Management Association, vol. 31(1), Spring.
    6. Jensen, Michael C, 1986. "Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers," American Economic Review, American Economic Association, vol. 76(2), pages 323-329, May.
    7. John D. Lyon & Brad M. Barber & Chih‐Ling Tsai, 1999. "Improved Methods for Tests of Long‐Run Abnormal Stock Returns," Journal of Finance, American Finance Association, vol. 54(1), pages 165-201, February.
    8. Lamont, Owen A. & Polk, Christopher, 2002. "Does diversification destroy value? Evidence from the industry shocks," Journal of Financial Economics, Elsevier, vol. 63(1), pages 51-77, January.
    9. Bradley, Michael & Desai, Anand & Kim, E. Han, 1988. "Synergistic gains from corporate acquisitions and their division between the stockholders of target and acquiring firms," Journal of Financial Economics, Elsevier, vol. 21(1), pages 3-40, May.
    10. Paul André & Maher Kooli & Jean-François L’Her, 2004. "The Long-Run Performance of Mergers and Acquisitions: Evidence from the Canadian Stock Market," Financial Management, Financial Management Association, vol. 33(4), Winter.
    11. Manohar Singh & Ike Mathur & Kimberly C. Gleason, 2004. "Governance and Performance Implications of Diversification Strategies: Evidence from Large U.S. Firms," The Financial Review, Eastern Finance Association, vol. 39(4), pages 489-526, November.
    12. 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.
    13. Owen Lamont & Christopher Polk, "undated". "The Diversification Discount: Cash Flows vs. Returns."," CRSP working papers 504, Center for Research in Security Prices, Graduate School of Business, University of Chicago.
    14. Fauver, Larry & Houston, Joel F. & Naranjo, Andy, 2004. "Cross-country evidence on the value of corporate industrial and international diversification," Journal of Corporate Finance, Elsevier, vol. 10(5), pages 729-752, November.
    15. Schlingemann, Frederik P. & Stulz, Rene M. & Walkling, Ralph A., 2002. "Divestitures and the liquidity of the market for corporate assets," Journal of Financial Economics, Elsevier, vol. 64(1), pages 117-144, April.
    16. Berger, Philip G & Ofek, Eli, 1996. "Bustup Takeovers of Value-Destroying Diversified Firms," Journal of Finance, American Finance Association, vol. 51(4), pages 1175-1200, September.
    17. 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.
    18. John A. Doukas & Ozgur B. Kan, 2004. "Excess Cash Flows and Diversification Discount," Financial Management, Financial Management Association, vol. 33(2), Summer.
    19. Ronald W. Best & Charles W. Hodges & Bing‐Xuan Lin, 2004. "Does Information Asymmetry Explain The Diversification Discount?," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 27(2), pages 235-249, June.
    20. Yakov Amihud & Baruch Lev, 1981. "Risk Reduction as a Managerial Motive for Conglomerate Mergers," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 605-617, Autumn.
    21. Denis, David J & Denis, Diane K & Sarin, Atulya, 1997. "Agency Problems, Equity Ownership, and Corporate Diversification," Journal of Finance, American Finance Association, vol. 52(1), pages 135-160, March.
    22. Owen A. Lamont & Christopher Polk, 2001. "The Diversification Discount: Cash Flows Versus Returns," Journal of Finance, American Finance Association, vol. 56(5), pages 1693-1721, October.
    23. Lewellen, Wilbur G, 1971. "A Pure Financial Rationale for the Conglomerate Merger," Journal of Finance, American Finance Association, vol. 26(2), pages 521-537, May.
    24. Fama, Eugene F. & French, Kenneth R., 1993. "Common risk factors in the returns on stocks and bonds," Journal of Financial Economics, Elsevier, vol. 33(1), pages 3-56, February.
    25. Amar Bhide, 1990. "Reversing Corporate Diversification," Journal of Applied Corporate Finance, Morgan Stanley, vol. 3(2), pages 70-81, June.
    26. Agrawal, Anup & Jaffe, Jeffrey F & Mandelker, Gershon N, 1992. "The Post-merger Performance of Acquiring Firms: A Re-examination of an Anomaly," Journal of Finance, American Finance Association, vol. 47(4), pages 1605-1621, September.
    27. 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.
    28. Berger, Philip G & Ofek, Eli, 1999. "Causes and Effects of Corporate Refocusing Programs," The Review of Financial Studies, Society for Financial Studies, vol. 12(2), pages 311-345.
    29. Fauver, Larry & Houston, Joel & Naranjo, Andy, 2003. "Capital Market Development, International Integration, Legal Systems, and the Value of Corporate Diversification: A Cross-Country Analysis," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 38(1), pages 135-158, March.
    30. Billett, Matthew T. & Mauer, David C., 2000. "Diversification and the value of internal capital markets: The case of tracking stock," Journal of Banking & Finance, Elsevier, vol. 24(9), pages 1457-1490, September.
    31. repec:bla:jfinan:v:59:y:2004:i:2:p:507-535 is not listed on IDEAS
    32. Megginson, William L. & Morgan, Angela & Nail, Lance, 2004. "The determinants of positive long-term performance in strategic mergers: Corporate focus and cash," Journal of Banking & Finance, Elsevier, vol. 28(3), pages 523-552, March.
    33. Loughran, Tim & Ritter, Jay R, 1997. "The Operating Performance of Firms Conducting Seasoned Equity Offerings," Journal of Finance, American Finance Association, vol. 52(5), pages 1823-1850, December.
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    Cited by:

    1. Kimberly Gleason & Anita Pennathur & Joan Wiggenhorn, 2014. "Acquisitions of family owned firms: boon or bust?," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 38(2), pages 269-286, April.
    2. Schönhaar, Sebastian, 2013. "Uncovering business portfolio transformation processes: Development of a metric to measure and quantify business portfolio transformations," Freiberg Working Papers 2013/01, TU Bergakademie Freiberg, Faculty of Economics and Business Administration.

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    More about this item

    Keywords

    Diversification; Long-run performance; G34; G14;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading

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