Financial Management articles from June 2004

Financial Management archives from June 2004

Does diversification cause the "diversification discount"?
June 22, 2004... Using recent econometric developments about causal inference, I examine whether diversification destroys value. I estimate the value effect of diversification by matching diversifying and single-segment firms on their propensity score--the...

Imperfect competition, debt, and exit.
June 22, 2004... We show that an unprofitable firm in an oligopoly product market may motivate a favorable merger by committing to continue production, thereby dissipating industry profits. A sufficiently high level of debt financing makes the firm's production...

CEO incentives, cash flow, and investment.
June 22, 2004... We estimate the impact of chief executive officer (CEO) incentives on the sensitivity of investment to cash flow during a period of strong economic growth. Our measure of the alignment of managers' and shareholders' interests, pay-performance...

Excess cash flows and diversification discount.
June 22, 2004... We study the impact of diversification on firm cash flows and excess value. Specifically, we investigate whether there is a direct link between the discount to diversification and excess cash flow reductions around related and unrelated...

Bank relationships and their effects on firm performance around the Asian financial crisis: evidence from Taiwan.
June 22, 2004... We evaluate the impact of bank relationships on firm performance for a sample of Taiwanese firms around the 1997 Asian financial crisis. We find a negative relation between the number of domestic-bank relationships and firm performance, but a...