Effect of Diversification on Capital Structure

28 Pages Posted: 24 Nov 2009

See all articles by Maurizio La Rocca

Maurizio La Rocca

Università degli Studi della Calabria

Tiziana La Rocca

Università degli Studi della Calabria

Dionigi Gerace

The University of Sydney

Ciorstan Smark

affiliation not provided to SSRN

Date Written: 2009-02-21

Abstract

Previous empirical financial studies have paid little attention to the role of diversification strategy on financial choices. This study analyses the financing strategies of multibusiness firms, suggesting the relevance of sorting the diversification phenomena into its related and unrelated components. The implications of our findings are important because they explain earlier contradictory results on capital-structure determinants and offer an explanation of how the degree of product specialization/diversification and the direction of diversification (related or unrelated) translate into different corporate financial behaviours.

Suggested Citation

La Rocca, Maurizio and La Rocca, Tiziana and Gerace, Dionigi and Smark, Ciorstan, Effect of Diversification on Capital Structure (2009-02-21). Accounting & Finance, Vol. 49, Issue 4, pp. 799-826, December 2009, Available at SSRN: https://ssrn.com/abstract=1512861 or http://dx.doi.org/10.1111/j.1467-629X.2009.00304.x

Maurizio La Rocca (Contact Author)

Università degli Studi della Calabria ( email )

Ponte Bucci, Cubo 3C
Rende (Cosenza), Cosenza 87036
Italy

HOME PAGE: http://www.mauriziolarocca.it

Tiziana La Rocca

Università degli Studi della Calabria ( email )

87036 Arcavacata di Rende CS
Italy

Dionigi Gerace

The University of Sydney ( email )

University of Sydney
Sydney, NSW 2006
Australia

Ciorstan Smark

affiliation not provided to SSRN

No Address Available

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