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The Coinsurance Effect of Corporate Diversification - An Empirical Analysis of the Accounting and Economic Implications
of: Dominik Nußmann
Springer Gabler, 2017
ISBN: 9783658193744 , 164 Pages
Format: PDF, Read online
Copy protection: DRM
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The Coinsurance Effect of Corporate Diversification - An Empirical Analysis of the Accounting and Economic Implications
Geleitwort
6
Vorwort
8
Table of Contents
10
List of Abbreviations
13
List of Symbols
15
List of Figures
20
List of Tables
21
1 Introduction
23
1.1 Motivation and Research Questions
23
1.2 Structure of the Thesis
26
2 The Firm Characteristic of Corporate Diversification
27
2.1 Basics about Corporate Diversification
27
2.1.1 Diversification Strategy
27
2.1.2 Measurement
31
2.2 Effects of Corporate Diversification
32
2.2.1 Benefits of Corporate Diversification
33
2.2.2 Costs of Corporate Diversification
33
2.3 Relevance of Corporate Diversification for Financial Economics Research
34
2.4 Application of Corporate Diversification to Related Accounting Research
37
3 Corporate Diversification and Earnings Quality
38
3.1 Introduction
38
3.2 Earnings Quality
43
3.2.1 Principles and Definition
43
3.2.2 Measurement
45
3.2.3 Determinants
48
3.2.4 Consequences
49
3.3 Prior Literature and Hypotheses Development
50
3.3.1 Literature on Corporate Diversification and Earnings Quality
50
3.3.2 Development of Testable Hypotheses
53
3.4 Research Design and Data
59
3.4.1 Variable Definition and Methodology
59
3.4.2 Data and Sample Selection
66
3.5 Empirical Results
68
3.5.1 Summary Statistics
68
3.5.2 Results of Diversification on Earnings Quality
73
3.5.3 Results of Coinsurance on Earnings Quality
75
3.5.4 Results of Coinsurance and Operating Volatility on Earnings Quality
78
3.6 Robustness Checks and Additional Results
82
3.6.1 Subsample of Diversified Firms
82
3.6.2 Endogeneity of Diversification Decision
85
3.6.3 Innate and Discretionary Components of Accruals Quality
90
3.6.4 Naive Comparison between Diversified and Focused Firms
96
3.7 Conclusion
101
4 Implication for the Excess Value of Corporate Diversification
103
4.1 Introduction
103
4.2 Preliminary Analysis: Operating Volatility of Diversified Firms
104
4.2.1 Theory and Hypothesis
105
4.2.2 Methodology and Sample
106
4.2.3 Results and Discussion
109
4.3 Literature Review and Hypotheses Development
114
4.3.1 Literature Review
114
4.3.2 Hypotheses Development
116
4.4 Research Design and Data
118
4.4.1 Methodology
118
4.4.2 Data Sample
121
4.5 Empirical Results
122
4.5.1 Descriptive Statistics
122
4.5.2 Results of Diversification on the Excess Value
124
4.5.3 Results of Diversification and Earnings Volatility on the Excess Value
126
4.5.4 Results of Diversification and Earnings Quality on the Excess Value
130
4.6 Sensitivity Analyses
136
4.6.1 Endogeneity Concerns
136
4.6.2 Alternative Specifications
142
4.6.3 Alternative Estimation Techniques
145
4.7 Conclusion
148
5 Concluding Remarks
150
5.1 Summary and Implications of Main Findings
150
5.2 Limitations and Suggestions for Future Research
152
Appendix
154
Appendix A: Relevance of Corporate Diversification
154
References
155
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