Does Diversification Cause the "Diversification Discount"?

By Belén Villalonga. 2000

826 citations recorded by the source corpus.

Subfields: Accounting, Economics and Econometrics, Finance

View Paper: https://www.semanticscholar.org/paper/e3c54f5afd07a756f24b99e7d747f1a5e78fd85d

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Citations in the corpus

Business Groups in Emerging Markets: Paragons or Parasites? (2007, background): “Sources (in English): Brazil—Leff (1978), Suzingan and Villela (1997), and Musacchio (2004); Chile—Khanna and Palepu (1999a, 2000c); China—Keister (2004); Costa Rica—private communication with A.”
International corporate diversification and performance: Does firm self-selection matter? (2009, background): “For example, Zaheer and Mosakowski (1997) find that liability of foreignness decreases with time.”
The causality direction of the corporate social responsibility – Corporate financial performance Nexus: Application of Panel Vector Autoregression approach (2019, background): “In the instance of the first order, profitability measures are treated as the most exogenous, conversely, diversification measures are treated as most endogenous (Campa & Kedia, 2002; Villalonga, 2004).”
How Do Family Ownership, Control, and Management Affect Firm Value? (2006, neutral): “They are also robust to using a propensity score matching estimator, which does not require exclusion restrictions for identification but assumes selection on observables (Villalonga, 2004).”
Firm Diversification and the Value of Corporate Cash Holdings (2011, background): “the reporting of segment information in 1997. Villalonga (2004a, 2004b) , and Berger”
Endogeneity - how failure to correct for it can cause wrong inferences and some remedies (2015, positive): “The importance of correcting for endogeneity is also highlighted by Villalonga (2004) who finds that, after using econometric methods that correct for sample selection, corporate diversification does not destroy value, a finding at variance with prior research that has not utilised such controls.”
Diversification Discount or Premium? New Evidence from the Business Information Tracking Series (2004, background): “Villalonga (1999) and Campa and Kedia (2002) find that diversified firms traded at a discount prior to diversifying.”
The Real Consequences of Market Segmentation (2012, background): “When retail investors withdraw capital from high-yield mutual funds, which are large buyers of speculative-grade bonds, arbitrage capital may not immediately offset this negative shock (Mitchell, Pedersen, and Pulvino, 2007; Duffie and Strulovici, 2009).”
Segment Profitability and the Proprietary and Agency Costs of Disclosure (2007, background): “…or all of the discount sometimes attributes the self-selection mainly to efficiency motives (e.g., Campa and Kedia 2002) and sometimes ascribes the self-selection at least partly to agency problems that exist at the diversified firm prior to its diversifying acquisitions (e.g., Villalonga 2004).”
The Value of Enterprise Risk Management (2011, neutral): “16 There is a recent literature that suggests that the well-documented diversification discount is an artifact of measurement error, managerial discretion in segment reporting, and endogeneity bias (e.g., Campa and Kedia, 2002; Graham, Lemmon, and Wolf, 2002; Villalonga, 2004).”
The home country in the age of globalization: how much does it matter for firm performance? (2004, background): “While a number of firms are active in multiple businesses, most of them tend to be diversified along related businesses (Villalonga, 2000).”