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Corporate diversification, vertical integration, and internal capital markets: A cross-country study

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  • Joshua D. Shackman

    (Touro University International)

Abstract

Abstract and Key Results ▪ In this paper I test the theory that internal capital markets are a motivation for both corporate diversification and vertical integration. I use a sample of 1560 firms from 39 countries. ▪ Using this data I also test theories about vertical integration and capital market development. I also test agency cost and taxation theories of diversification and vertical integration. ▪ I find a significant and negative relationship between corporate diversification and capital market development ▪ I find a significant and positive relationship between vertical integration and capital market development.

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  • Joshua D. Shackman, 2007. "Corporate diversification, vertical integration, and internal capital markets: A cross-country study," Management International Review, Springer, vol. 47(4), pages 479-504, October.
    • Handle: RePEc:spr:manint:v:47:y:2007:i:4:d:10.1007_s11575-007-0027-z
    DOI: 10.1007/s11575-007-0027-z
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