EconPapers    
Economics at your fingertips  
 

Do financial conglomerates create or destroy value? Evidence for the EU

Iman Lelyveld and Klaas Knot

DNB Working Papers from Netherlands Central Bank, Research Department

Abstract: There is an ongoing debate whether firm focus creates or destroys shareholder value. Earlierliterature has shown significant diversification discounts: firms that engage in multiple activitiesare valued less. Various factors are important in the size of the discount, for example crosssubsidizationand agency problems. The extant literature, however, generally focuses on nonfinancialfirms or traditional banking (cf Laeven and Levine (2007) and Schmid and Walter(2006)). Our paper focuses specifically on the valuation of bank-insurance conglomerates. We findno universal diversification discount but significant variability. Size, complexity and risk seem tobe important determinants.

Keywords: financial conglomerates; firm valuation (search for similar items in EconPapers)
JEL-codes: G2 G3 L2 (search for similar items in EconPapers)
Date: 2008-05
New Economics Papers: this item is included in nep-bec and nep-cfn
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
https://www.dnb.nl/binaries/Working%20paper%20174_tcm46-175062.pdf (application/pdf)

Related works:
Journal Article: Do financial conglomerates create or destroy value? Evidence for the EU (2009) Downloads
Working Paper: Do financial conglomerates create or destroy value? Evidence for the EU (2008) Downloads
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:dnb:dnbwpp:174

Access Statistics for this paper

More papers in DNB Working Papers from Netherlands Central Bank, Research Department Contact information at EDIRC.
Bibliographic data for series maintained by Richard Heuver ().

 
Page updated 2020-07-10
Handle: RePEc:dnb:dnbwpp:174