Annotated Bibliography on Value Creation Through Diversification
Glvan, A., Pindado, J., & De La Torre, C. (2014). Diversification: A value-creating or value-destroying strategy? Evidence from the Eurozone countries. Journal of Financial Management, Markets, and Institutions, 2(1), 43-64.
This research is aimed at showing the relationship between company value and product diversification strategy. The study digs deep into the types and levels of diversification to determine the real value addition that can be achieved using this strategy. The method used to calculate the benefits of diversification is regression, and the diversification measures used include the Revenue-based Herfindahl Index and Total Entropy. Other traditional variables that impact firms' value are also included in the function.
The study results showed that diversification impacts the firm's value, but a breakpoint marks the maximum benefits. Going beyond this point drops the value of the company. A more significant section of previous research is based outside the UK and US, and that's is why we used the Eurozone dataset to show the evidence. To achieve consistency, we used panel data methodology, and it involved observing over ten firm-years, followed by regression tests on variables that showed some character.
Setianto, R. H. (2020). Corporate diversification and firms' value in an emerging economy: the role of growth opportunity. Journal of Asian Business and Economic Studies.
This study applies an empirical research method to show the relationship between firm diversification and its value in modern economic environments. The data used is from a manufacturing firm based in Indonesia and the span period is five years. A nonlinear regression model was applied since the experiment was to determine if there was a nonlinear relationship between value and diversification. The test was also aimed at observing any role by growth opportunities in determining the company's value in connection with the diversification strategy.
The outcome of the research was that there is a relationship between U-shaped diversification and value. At low levels of diversification, the company's...
References
Glvan, A., Pindado, J., & De La Torre, C. (2014). Diversification: A value-creating or value-destroying strategy? Evidence from the Eurozone countries. Journal of Financial Management, Markets, and Institutions, 2(1), 43-64.
Otero-Serrano, J. (2011). Does Firm Diversification Represent a Value Added for Stockholders? International Journal of Business and Finance Research, 5(4), 99-113.
Schommer, M., Richter, A., & Karna, A. (2019). Does the diversification–firm performance relationship change over time? A meta?analytical review. Journal of Management Studies, 56(1), 270-298.
Setianto, R. H. (2020). Corporate diversification and firms' value in an emerging economy: the role of growth opportunity. Journal of Asian Business and Economic Studies.
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