The Impact of Vertical Integration and Horizontal Diversification on the Value of Energy Firms

  title={The Impact of Vertical Integration and Horizontal Diversification on the Value of Energy Firms},
  author={C. Pozzi and Philippe Vassilopoulos},
We analyse the long-run return performance of 27 value-weighted equity portfolios based on a classification of the US energy sector that follows traditional industrial organization categories. When adjusted to market and fuel risks, portfolio returns show that both vertical integration and horizontal diversification failed to produce shareholder value during the 1990–2003 period. This confirms the theoretical predictions of both financial economics and industrial organization and shows that the… Expand
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