The Coinsurance Effect of Corporate Diversification (eBook)

An Empirical Analysis of the Accounting and Economic Implications

Dominik Nußmann (Autor)

eBook Download: PDF

2017 | 1st ed. 2018
XXIV, 146 Seiten
Springer Fachmedien Wiesbaden (Verlag)
978-3-658-19374-4 (ISBN)

Infos

Dominik Nußmann comprehensively analyzes the coinsurance effect of corporate diversification by first providing a structured review of all relevant findings presented in the financial economics and accounting literature. Based on this review, he examines important accounting and economic implications of the coinsurance effect by means of two comprehensive empirical analyses. In particular, he finds that diversified firms benefit from coinsurance through financial as well as accounting synergies which entail considerable value-enhancing potentials.

Dr. Dominik Nußmann received his doctoral degree from the University of Cologne under the supervision of Prof. Dr. Carsten Homburg (Department of Business Administration and Management Accounting).  

Inhalt

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

Produkt-Details

• Erscheint lt. Verlag: 22.8.2017
• Reihe/Serie: Quantitatives Controlling
• Reihe/Serie: Quantitatives Controlling
• Zusatzinfo: XXIV, 146 p. 6 illus.
• Verlagsort: Wiesbaden
• Sprache: englisch
• Themenwelt: Wirtschaft ► Betriebswirtschaft / Management ► Unternehmensführung / Management
• Schlagworte: Accruals • Agency Costs • Earnings Quality • Earnings volatility • Excess Value of Corporate Diversification • Firm Characteristic
• ISBN-10: 3-658-19374-3 / 3658193743
• ISBN-13: 978-3-658-19374-4 / 9783658193744