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M&As Trends in Emerging Capital Markets Read chapter Read first chapter

2020 | OriginalPaper | Chapter

Corporate Diversification-Performance Puzzle in BRIC

Author : Svetlana Grigorieva

Published in: Strategic Deals in Emerging Capital Markets

Publisher: Springer International Publishing

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Abstract

Researchers have long tried to define the impact of corporate diversification on firm value. Academic papers mainly concentrate on the effects of corporate diversification in mature markets, while its consequences in emerging capital markets are less explored. This article presents the results of an empirical analysis of corporate diversification strategies of a sample of companies from BRIC countries that expanded via acquisitions during 2000–2013. We contribute to the existing literature by examining the effects of corporate diversification on firm value during the pre- and post-crisis periods. In line with other studies, we distinguish between related and unrelated diversification, and in contrast to them, we single out and separately analyze horizontal, conglomerate, and vertical acquisitions. Based on a sample of 319 deals initiated by companies from BRIC countries, we found positive (3.32% and 9.01%) and statistically significant cumulative abnormal returns for conglomerate acquisitions during the pre- and post-crisis periods, correspondingly. We also found that the market reacts positively and statistically significantly to the announcements of horizontal and vertical integration only during the pre-crisis period.

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previous chapter Domestic M&As in Russia: Performance and Success Factors
next chapter Corporate International Diversification and Performance: An Economic Profit Viewpoint—Evidence from BRIC Companies
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Metadata
Title
Corporate Diversification-Performance Puzzle in BRIC
Author
Svetlana Grigorieva
Copyright Year
2020
Book
Strategic Deals in Emerging Capital Markets

Print ISBN: 978-3-030-23849-0

Electronic ISBN: 978-3-030-23850-6

Copyright Year: 2020

DOI
https://doi.org/10.1007/978-3-030-23850-6_9