The Cost of Diversity: The Diversification Discount and Inefficient Investment

By Raghuram G. Rajan, Henri Servaes, Luigi Zingales. 2000

1,870 citations recorded by the source corpus.

Subfields: Accounting, Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/a53bccfa4a6b0756498e2adc1420e7a5c6c476be

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Citations in the corpus

Cross-border acquisitions and firm value: An analysis of emerging-market multinationals (2009, background): “2Meyer, Milgrom, and Roberts (1992), Rajan and Zingales (1995), Rajan, Servaes, and Zingales (2000), and Scharfstein and Stein (2000) present models in which divisional managers exert influence to increase the assets under their control.”
Specialization and Success: Evidence from Venture Capital (2009, background): “This result seems consistent with the views expressed in Rajan et al. (2000) and Scharfstein and Stein (2000), but counter to that in Stein (1997).”
The causal effect of board size in the performance of small and medium-sized firms (2008, background): “16Both Yermack (1996) and Rajan, Servaes, and Zingales (2000) find evidence that more diversified firms are less profitable.”
Empire-Building or Bridge-Building? Evidence from New CEOs' Internal Capital Allocation Decisions (2009, methodology): “The dark-side theories of internal capital markets suggest that the agency conflict and the power struggle between the CEO and the divisional managers may cause investment distortion at the segment level within conglomerates (Rajan, Servaes, and Zingales 2000; Scharfstein and Stein 2000).”
Is Corporate Diversification Beneficial in Emerging Markets (2002, positive): “However, in the U.S., the empirical evidence by Lamont (1997), Houston, James, and Marcus (1997), Shin and Stulz (1998), Scharfstein (1998), and Rajan, Servaes, and Zingales (2000) on the efficacy of internal capital markets suggests that funds may actually flow in the wrong direction, i.e. from…”
The Bright Side of Internal Capital Markets (2001, background): “Most papers in the literature define industries at the two-digit or three-digit SIC level (see Lamont (1997), Scharfstein (1998), and Rajan et al. (2000)).”
The Influence of Governance on Investment: Evidence from a Hazard Model (2011, neutral): “This is consistent with the conclusions of Richardson (2006) and Harford, Mansi, and Maxwell (2008). It is also likely that investment and industry factors are strongly correlated, and that there is persistence in investment behavior. Therefore, we follow Harford, Mansi, and Maxwell (2008) and estim”
Learning about Internal Capital Markets from Corporate Spin-offs (2002, positive): “A recent line of research has been examining what actually happens when the money is inside the firm (Lamont (1997), Shin and Stulz (1998), Scharfstein (1998), Rajan et al. (2000)). How, for example, does corporate headquarters allocate funds across business and geographic units? If information and ”
Corporate cash holdings: Causes and consequences (2015, neutral): “This is consistent with evidence that inefficient allocation of internal funds relates to problems of overinvestment and rent-seeking activities (see for example Shin and Stulz, 1988; Scharfstein and Stein, 2000; Rajan et al., 2000).”