Leverage and investment in diversified firms |
| |
Authors: | Seoungpil Ahn David J Denis Diane K Denis |
| |
Institution: | 1. Concordia University, Montreal, Que., Canada H3G 1M8;2. Krannert Graduate School of Management, Purdue University, West Lafayette, IN 47907, USA |
| |
Abstract: | Within diversified firms, the negative impact of leverage on investment is significantly greater for high q than for low q segments and significantly greater for non-core than for core segments. This differs substantially from focused firms and is consistent with the view that diversified firms allocate a disproportionate share of their debt service burden to their higher q and non-core segments. We also find that, among low-growth firms, the positive relation between leverage and firm value is significantly weaker in diversified firms than in focused firms. We conclude that the disciplinary benefits of debt are partially offset by the additional managerial discretion in allocating debt service that is provided by the diversified organizational structure. |
| |
Keywords: | G32 G34 |
本文献已被 ScienceDirect 等数据库收录! |
|