Explaining the Diversification Discount

By J. Campa, Simi Kedia. 2001

1,579 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics

View Paper: https://www.semanticscholar.org/paper/8e7ae612c0e3ba12d977b5e59e337c7737029dfe

How researchers see this paper

The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.

In Accounting

In Economics and Econometrics

Citations in the corpus

Internal Capital Markets and Investment Policy: Evidence from Corporate Spinoffs (2004, positive): “In addition, studies by Campa and Kedia (1999), Graham et al. (2002), and Maksimovic and Phillips (2002) argue that the link between diversification and value is not causal, but rather is the result of endogenous firm choices.”
Is Corporate Diversification Beneficial in Emerging Markets (2002, positive): “In particular, Campa and Kedia (2002) and Villalonga (2002) argue that firms already perform poorly before they decide to diversify, while Graham, et al. (2002) find that firms tend to acquire companies that trade at a discount, which leads to a measured discount subsequently.”
Does Diversification Create Value in the Presence of External Financing Constraints? Evidence from the 2007-2009 Financial Crisis (2016, positive): “7 We apply this exclusion restriction to two variables that have been shown to meet such conditions in prior studies of the diversification discount: the fraction of all firms in an industry that are diversified (Campa and Kedia 2002) and an indicator for whether the firm reports a nonzero amount fo”
Opportunity Costs and Non-Scale Free Capabilities: Profit Maximization, Corporate Scope, and Profit Margins (2010, background): “If poorly performing firms tend to diversify, then not taking into account past performance and its effect on the decision to diversify will result in attributing the discount to diversification activity, rather than to the poor performance of the firm (Campa and Kedia, 2002: 1732).”
The "Dominant Bank Effect:" How High Lender Reputation Affects the Information Content and Terms of Bank Loans (2010, methodology): “In the finance literature, authors have resolved the problem of endogenous dummy variables using two-step “treatment effects” procedures (e.g., Campa and Kedia 2002; Fang 2005), which are based on 10 The results are qualitatively unchanged using [−2, 0] and [−1, 0] windows.”
Does Good Corporate Governance Include Employee Representation? Evidence from German Corporate Boards (2006, positive): “Consequently, in this section we implement an instrumental variables approach similar to that used by Campa and Kedia (2002) and Doidge, Karolyi, and Stulz (2004).”
Corporate Governance and the Spinoff Decision (2007, neutral): “4 See Chevalier (2000), Graham, Lemmon and Wolf (2001), Whited (2001), Campa and Kedia (2002), and Villalonga (2004a, 2004b).”
Corporate Diversification and Credit Constraints: Real Effects across the Business Cycle (2006, methodology): “We borrow our second and third instruments from Campa and Kedia (2002).”
Capital Market Development, International Integration, Legal Systems, and the Value of Corporate Diversification: A Cross-Country Analysis (2003, background): “, Graham, Lemmon, and Wolf (2002) and Campa and Kedia (2002)). At the same time, some theoretical work suggests that there may also be benefits from diversification. In particular, work by Williamson (1975), Gertner, Scharfstein, and Stein (1994), Harris and Raviv (1996), and Stein (1997) suggests t”