Corporate Diversification: Theory vs. Reality : Does diversification destroy firm value?

ISBN-13: 9783639881356 / Angielski / Miękka / 2016 / 132 str.

Simona Jabconová

Opis

In this work I review theories and empirical studies on corporate diversification by means of which I reveal numerous factors influencing a firm's decision to diversify as well as the diversification's effect on firm value. In addition to driving forces, I identify a number of firm- and industry-specific prerequisites for corporate diversification. Obviously, the trends in diversification strategy have changed over time and so have also empirical conclusions about the diversification's effect on firm value. Even though arguments in favor of the diversification discount seem to prevail, recently, there has been risen a vast amount of critique and evidence questioning this conclusion. Apparently, diversification per se might be considered value-maximizing strategy. Yet, diversification may result in a decrease in firm value conditional upon several factors - scale and scope of diversification, expansion strategy, firm structure as well as current business environment.

O autorze

Simona Jabconová, born in 1990 in Kosice, Slovakia, studied International Business Administration at the University of Vienna in Austria from 2009 till 2015 when she graduated with a major in Corporate Finance and Operations Research.