EconPapers    
Economics at your fingertips  
 

Does corporate diversification reduce value in high technology firms?

Nilakshi Borah (), Liu Pan (), Jung Chul Park () and Nan Shao ()
Additional contact information
Nilakshi Borah: University of Wisconsin-La Crosse
Liu Pan: Financial Research Institute of CCTV Securities Information Channel
Jung Chul Park: University of South Florida
Nan Shao: Henan University of Economics and Law

Review of Quantitative Finance and Accounting, 2018, vol. 51, issue 3, No 5, 683-718

Abstract: Abstract We find that firm value is reduced via industrial diversification and this reduction in value depends upon a firm’s technology intensity. We consider that asymmetric information problems are more severe in technology intensive industries and find that high tech industry firms present distinctly larger value reduction when compared to low tech industry firms. The negative valuation effect is greater for firms that have a relatively larger amount of intangible assets and greater R&D capital. We determine that our findings are robust to different estimation methods and alternative excess value measures.

Keywords: Diversification discount; High tech industries; Information asymmetry (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
Date: 2018
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s11156-017-0685-2 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:rqfnac:v:51:y:2018:i:3:d:10.1007_s11156-017-0685-2

Ordering information: This journal article can be ordered from
http://www.springer.com/finance/journal/11156/PS2

DOI: 10.1007/s11156-017-0685-2

Access Statistics for this article

Review of Quantitative Finance and Accounting is currently edited by Cheng-Few Lee

More articles in Review of Quantitative Finance and Accounting from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2025-03-19
Handle: RePEc:kap:rqfnac:v:51:y:2018:i:3:d:10.1007_s11156-017-0685-2