publication . Article . 2014

Diversification: A Value-Creating or Value-Destroying Strategy? Evidence from the Eurozone Countries

Antonio Galván Vera;
Open Access
  • Published: 01 Jan 2014 Journal: Journal of Financial Management, Markets and Institutions, issue 1 7, pages 43-64
Abstract
In this paper, we provide evidence on how diversification strategy impacts on excess value in a sample of Eurozone firms by using the data panel methodology. Specifically, we study the effect of the levels and types of the product diversification on the premium or discount that diversified firms trade at. Preliminary results are consistent with the value-destroying expectations and show that diversified companies trade at a discount in the Eurozone countries. However, a more accurate analysis reveals that the relation between diversification and excess value is non-linear; that is, diversification strategy first creates value and then, after a certain breakpoint...
Subjects
free text keywords: Eurozone; Excess Value; Product Diversification; Relatedness.
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publication . Article . 2014

Diversification: A Value-Creating or Value-Destroying Strategy? Evidence from the Eurozone Countries

Antonio Galván Vera;