PUBLICACIONES

Is there a corporate diversification discount or premium? Evidence from Chile

ISI: Is there a corporate diversification discount or premium? Evidence from Chile

CHRISTIAN ESPINOZA M., FELIX LOPEZ I., MAURICIO JARA B.

2015 - Academia Revista Latinoamericana de Administracion - Vol 28, Nº 3, Pp 396-418

Abstract

Purpose We analyzed the effect of the corporate ownership diversification, i.e., how the involvement in the ownership of other non-financial firms affects the value of listed firms. We controlled for unrelated diversification when the firm has different business segments in different sectors.

Design/methodology/approach We analyzed a sample of Chilean listed firms between 2005 and 2009, in two stages. First, we computed the diversification premium or discount, defined as the part of the firms’ capitalization that stems from the diversification strategy. Then, we regressed the premium or discount against the business and ownership diversification measures and other control variables. Findings In addition to a discount for unrelated business diversification, we found an ownership diversification discount when non-financial firms are shareholders of other firms. However, this discount turns into a premium when the firm gains control of the owned firm, especially in related sectors.

Originality/value We pioneer the analysis of the ownership diversification in Latin American firms. Our results apply not only to Chile but also to a number of Latin American countries since many of these countries have, in common with Chile, a concentrated corporate ownership structure and a weak protection of investors’ rights

Keywords

Emerging Latin-American Markets, Chilean Firms, Unrelated Diversification, Ownership participation, Firm’s Value

¿Quieres seguir leyendo? [Accede a la publicación completa]

¿Cómo los hombres podemos ser aliados en la prevención de la violencia de género?

El martes 26 de mayo, el Observatorio de Gestión de Personas de la Facultad de Economía y negocios de la Universidad de Chile, junto al centro de Desarrollo Gerencial (Unegocios), rea...

¿Se han agotado los Recursos Naturales de Chile?

El 18 de mayo de 2020 Chile se convirtió en el primer país latinoamericano con sobregiro ecológico, es decir, hemos agotado como país los recursos naturales que tenemos ...

Todos los Derechos © 2014 | Departamento de Administración - Facultad de Economía y Negocios - Universidad de Chile - Diagonal Paraguay 257, torre 26, oficina 1101, piso 11, Santiago, Chile.