Laeven, Luc2014-08-152014-08-152001-12https://hdl.handle.net/10986/19407The author examines the effect of product and geographic diversification on firm value for a sample of 1,914 corporations in 18 countries. His results indicate that both product and geographic diversification destroy value at high levels of diversification, suggesting that agency and influence costs arising from the increased complexity outweigh the benefits of diversification at high levels. Geographic diversification is valuable at low levels, however. The author finds that insider ownership is associated with less diversification, across both product and geographic segments, suggesting that insiders view corporate diversification as value destroying.en-USCC BY 3.0 IGOAGENCY PROBLEMSASSETSCAPITAL MARKETSCOMPANYCOMPARATIVE ADVANTAGECONGLOMERATE MERGERSCONGLOMERATESCORPORATE FINANCECORPORATE GOVERNANCECORPORATE OWNERSHIPCORPORATE VALUECORPORATIONCORPORATIONSDEBTDIVERSIFICATIONECONOMIC THEORYECONOMIES OF SCOPEEFFICIENCY OF CAPITALEXPECTED RETURNSEXPENDITURESFINANCIAL CRISISFINANCIAL SECTORFIRM SIZEFIRMSFOREIGN SALESGLOBAL CAPITALHUMAN CAPITALMERGERSPRIVATE COMPANIESPROFITABILITYREGRESSION ANALYSISSHAREHOLDERSTHEORY OF THE FIRMVALUATION10.1596/1813-9450-2729