This paper evaluates the effect of diversification strategy on corporate value for a sample of Italian companies. It accounts for both the level of diversification and relatedness components. Empirical analyses show a U-shaped curvilinear relationship between diversification and value. In contrast to the main-stream literature, our results highlight that related diversification has a negative effect, while unrelated diversification is a value-creating strategy.
Multibusiness firms and performance in Italy. What role does relatedness play?
La Rocca, Maurizio
Primo
;La Rocca, Tiziana;
2018-01-01
Abstract
This paper evaluates the effect of diversification strategy on corporate value for a sample of Italian companies. It accounts for both the level of diversification and relatedness components. Empirical analyses show a U-shaped curvilinear relationship between diversification and value. In contrast to the main-stream literature, our results highlight that related diversification has a negative effect, while unrelated diversification is a value-creating strategy.File in questo prodotto:
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2018 - European Research on Management and Business Economics.pdf
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