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- Publisher
- World Scientific Publishing Company
- Copyright
- Copyright ©
- ISSN
- 0219-0915
- eISSN
- 1793-6705
- DOI
- 10.1142/S0219091511002214
- Publisher site
- See Article on Publisher Site
Abstract
The main purpose of this paper is to investigate empirically whether corporate diversification reduces the risk of the diversifying firm. We investigate this issue using a sample of diversifying acquisitions and various risk measures. We find that corporate diversification tends to decrease the risk of some firms but increase the risk of many others. On average corporate diversification does not lower firm risk. These findings call into question the notion that corporate diversification strictly reduces firm risk.
Journal
Review of Pacific Basin Financial Markets and Policies – World Scientific Publishing Company
Published: Sep 1, 2011
Keywords: Corporate diversification systematic risk firm-specific risk total risk acquisitions