THEORETICAL FOUNDATION OF DIVERSIFICATION DECISIONS: OPPORTUNISM OR FINANCIAL BENEFITS

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Raffaele Staglianò ORCID logo, Maurizio La Rocca ORCID logo

https://doi.org/10.22495/cocv8i2p4

Abstract

The impact of firm diversification on firm value has received considerable attention from economists. However, there is no consensus on the direction of this relationship. It may be that theoretical and empirical models do not capture several complexities of real-life setting, that affect the motivation to diversify. This article surveys recent studies that extend traditional frameworks to incorporate relevant aspect of corporate governance topics.

Keywords: Agency Costs, Information Asymmetry, Corporate Diversification, Firm Value

How to cite this paper: Staglianò, R., & La Rocca, M. (2011). Theoretical foundation of diversification decisions: Opportunism or financial benefits. Corporate Ownership & Control, 8(2), 37-45. https://doi.org/10.22495/cocv8i2p4