Journal ArticleDOI
Corporate diversification strategies and capital structure
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TLDR
In this article, the authors find that diversification across product lines is at best unrelated to debt usage; it may be negatively correlated with debt usage in some instances. And they also find that geographic diversification, asset turnover, and firm size as well as other variables are correlated with corporate leverage.About:
This article is published in The Quarterly Review of Economics and Finance.The article was published on 2003-01-01. It has received 94 citations till now. The article focuses on the topics: Diversification (marketing strategy) & Capital structure.read more
Citations
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Internationalization, capital structure, and cost of capital: evidence from French corporations
Manohar Singh,Ali Nejadmalayeri +1 more
TL;DR: In this paper, the authors examined the relationship between international diversification, financial structure, and their individual and interactive implications for the combined debt and equity cost of capital for a sample of French corporation.
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Diversification strategy, capital structure, and the Asian financial crisis (1997–1998): evidence from Singapore firms†
TL;DR: In this paper, the authors use agency theory to predict the influence of related and unrelated product diversification on a firm's level of debt financing and argue that the link between diversification and capital structure is moderated by the environment in which firms operate.
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Effect of diversification on capital structure
TL;DR: This article analyzed the financing strategies of multibusiness firms, suggesting the relevance of sorting the diversification phenomena into its related and unrelated components and explained how the degree of product specialization/diversification and the direction of diversification translate into different corporate financial behaviours.
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Ownership structure, corporate diversification and capital structure: evidence from China's publicly listed firms
TL;DR: In this article, the authors investigate whether and to what extent, corporate diversification into related and unrelated businesses affects capital structure choices, and whether ownership structure is germane to the understanding of corporate diversifying strategies and debt-equity financing choices.
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Product diversification strategy and financial performance: meta-analytic evidence on causality and construct multidimensionality
TL;DR: In this paper, the authors meta-analytically integrate empirical data from 104 studies published between 1970 and 2005 and test whether the popular proposition that diversification strategy impacts financial performance holds after controlling for the difference between correlational estimates that indicate mere association and such that allow for inferring causation.
References
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Journal Article
The Cost of Capital, Corporation Finance and the Theory of Investment
TL;DR: In this article, the effect of financial structure on market valuations has been investigated and a theory of investment of the firm under conditions of uncertainty has been developed for the cost-of-capital problem.
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Corporate financing and investment decisions when firms have information that investors do not have
TL;DR: In this paper, a firm that must issue common stock to raise cash to undertake a valuable investment opportunity is considered, and an equilibrium model of the issue-invest decision is developed under these assumptions.
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Determinants of corporate borrowing
TL;DR: In this article, the authors predict that corporate borrowing is inversely related to the proportion of market value accounted for by real options and rationalize other aspects of corporate borrowing behavior, such as the practice of matching maturities of assets and debt liabilities.
Posted Content
What Do We Know About Capital Structure? Some Evidence from International Data
Raghuram G. Rajan,Raghuram G. Rajan,Raghuram G. Rajan,Luigi Zingales,Luigi Zingales,Luigi Zingales +5 more
TL;DR: In this paper, the authors investigate the determinants of capital structure choice by analyzing the financing decisions of public firms in the major industrialized countries and find that factors identified by previous studies as important in determining the cross-section of the capital structure in the U.S. affect firm leverage in other countries as well.
Journal ArticleDOI
What Do We Know about Capital Structure? Some Evidence from International Data
Raghuram G. Rajan,Luigi Zingales +1 more
TL;DR: In this paper, the authors investigate the determinants of capital structure choice by analyzing the financing decisions of public firms in the major industrialized countries and find that factors identified by previous studies as correlated in the cross-section with firm leverage in the United States, are similarly correlated in other countries as well.