Diversification's effect and manager experience on investment efficiency

被引：2

作者：

Hsiao, Hsiao-Fen ^{[1
]}

Tang, Jinquan ^{[1
]}

Wen, Conghua ^{[2
]}

机构：

[1] Minjiang Univ, Newhuadu Business Sch, Fuzhou, Peoples R China

[2] Xian Jiaotong Liverpool Univ, Dept Financial & Actuarial Math, Suzhou, Peoples R China

来源：

ECONOMIC ANALYSIS AND POLICY | 2024年 / 81卷

关键词：

Diversification; Manager experience; Overinvestment; Underinvestment; Fund allocation; INTERNAL CAPITAL-MARKETS; CORPORATE DIVERSIFICATION; DISCOUNT;

D O I：

10.1016/j.eap.2024.01.009

中图分类号：

F [经济];

学科分类号：

02 ;

摘要：

This paper discusses whether diversification is the optimal business strategy for a firm and whether diversification leads to efficient fund allocation. The analysis reveals that bad divisions in diversified firms exhibits over-investment with higher investment levels than ineffective specialized firms. Meanwhile, good divisions of diversified firms shows lower investment levels than effective specialized firms. This paper further analyzes three types of managers according to their time preferences, namely time-consistent exponential, less-experienced, and sophisticated managers. Their views on diversification and its effect on the investment efficiency are studied.

引用

页码：890 / 900

页数：11

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