Corpus ID: 17369990

Two Puzzles about the Diversification Discount: Sfas # 131 and " Pseudo-conglomerates " Two Puzzles about the Diversification Discount: " Pseudo-conglomerates " and Sfas # 131

@inproceedings{Sanzhar2003TwoPA,
  title={Two Puzzles about the Diversification Discount: Sfas # 131 and " Pseudo-conglomerates " Two Puzzles about the Diversification Discount: " Pseudo-conglomerates " and Sfas # 131},
  author={Sergey V. Sanzhar and J. Franks and D. Goldreich and F. Gomes and Alexei Jiltsov and Matthias Kahl and Jan Mahrt-Smith and S. Nagel and K. Nyborg and David Stolin},
  year={2003}
}
  • Sergey V. Sanzhar, J. Franks, +7 authors David Stolin
  • Published 2003
  • I document a large and significant diversification discount in multi-division firms that are diversified neither industrially nor geographically. All divisions of these firms, which are called “pseudo-conglomerates”, operate in the same finely defined industry. Since divisions of pseudo-conglomerates should face similar investment opportunities, this suggests that the well-documented conglomerate discount is not caused by inefficient internal capital markets. Using pseudo-conglomerates avoids… CONTINUE READING

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