Onali, E and Mascia, DV orcid.org/0000-0002-3776-0420 (2022) Corporate diversification and stock risk: Evidence from a global shock. Journal of Corporate Finance, 72. 102150. ISSN 0929-1199
Abstract
We investigate the impact of corporate diversification on stock risk. For identification, we exploit an exogenous shock on volatility expectations related to COVID-19 lockdowns resulting in a period of high volatility. We show that firms that diversify only internationally experience a lower post-shock increase in daily volatility. However, diversifying only by business segment leads to a higher increase in post-shock daily volatility. Our main results are robust to different proxies for international and business diversification and daily volatility. Overall, these findings provide a more nuanced picture of the potential impact of corporate diversification on stock risk.
Metadata
Item Type: | Article |
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Authors/Creators: |
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Copyright, Publisher and Additional Information: | © 2021 Elsevier B.V. All rights reserved. This is an author produced version of an article published in Journal of Corporate Finance. Uploaded in accordance with the publisher's self-archiving policy. |
Keywords: | Diversification; Pandemic; Stock Risk; Volatility |
Dates: |
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Institution: | The University of Leeds |
Academic Units: | The University of Leeds > Faculty of Business (Leeds) > Accounting & Finance Division (LUBS) (Leeds) |
Depositing User: | Symplectic Publications |
Date Deposited: | 05 Jan 2022 14:26 |
Last Modified: | 20 Jun 2023 00:13 |
Status: | Published |
Publisher: | Elsevier |
Identification Number: | 10.1016/j.jcorpfin.2021.102150 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:181784 |