| A Firm`s Growth and its Diversification Effects |
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Taek Ho Kwon |
| 기업의 성장과 다각화 효과 |
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권택호 |
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| Abstract |
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A firm’s diversification is closely related with the firm’s growth strategies. While the sales growth of a firm affects the computation result of diversification index which reveals the degree of the firm’s diversification. This paper tests the diversification and firm value relations considering a firm’s sales growth. The test results show that the negative effect of diversification comes from the diversification conducted by firms that have been experienced low (negative) sales growth. On the contrary, the diversifications of the high sales growth firms had a tend to be positively related with firm value. These results support the notion that sales growth could play a big role in the analyses of a firm’s diversification effect. The paper also tests whether there is any difference in the test results through measuring the diversification index. The test results confirm that the diversification effect could be different by digits adopted to classify a firm’s sales item. Empirical results of the paper remain robust to different model and sample specifications. |
| Key Words:
다각화 효과,다각화지수,다각화할인,매출성장률,산업분류,Diversification Discount,Diversification Index,Effects of Diversification,Industrial Classification,Sales Growth |
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