search query: @author Rajan, R. / total: 5
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| Author: | Rajan, R. |
| Title: | The cost of diversity: the diversification discount and inefficient investment |
| Journal: | Journal of Finance
2000 : FEB, VOL. 55:1, p. 35-80 |
| Index terms: | FINANCE COSTS DIVERSITY |
| Language: | eng |
| Abstract: | The authors model the distortions that internal power struggles can generate in the allocation of resources between divisions of a diversified firm. The model predicts that if divisions are similar in the level of their resources and opportunities, funds will be transferred from divisions with poor opportunities to divisions with good opportunities. When diversity in resources and opportunity increases, however, resources can flow toward the most inefficient division, leading to more inefficient investment and less valuable firms. |
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