Diversification in Emerging Markets: The Case of Chilean Firms

35 Pages Posted: 16 Jan 2014

See all articles by Mauricio Jara-Bertin

Mauricio Jara-Bertin

University of Chile - Business School

Christian Espinosa

Universidad Diego Portales

Félix J. López-Iturriaga

University of Valladolid - Department of Financial Economics and Accounting; National Research University Higher School of Economics - International Laboratory of Intangible-driven Economy

Date Written: December 1, 2013

Abstract

This study is the first to analyze the effect on firm value of companies when they participate in the ownership of others companies in an emerging South American economy. For a sample of 83 non-financial Chilean companies traded in the 2005-2009 period, we find evidence of a discount for participate in ownership of other companies. However, this discount turns into a premium when participation in the ownership of another company results in control, especially in related sectors. In addition, we find a discount for unrelated corporate diversification similar to that found for other economies.

Keywords: Emerging Latin-American Markets, Chilean Firms, Unrelated Diversification, Ownership participation, Firm’s Value

JEL Classification: C30, C33, G15, G30, G32, G34

Suggested Citation

Jara-Bertin, Mauricio Alejandro and Espinosa, Christian and Lopez-Iturriaga, Felix Javier, Diversification in Emerging Markets: The Case of Chilean Firms (December 1, 2013). Available at SSRN: https://ssrn.com/abstract=2379169 or http://dx.doi.org/10.2139/ssrn.2379169

Mauricio Alejandro Jara-Bertin (Contact Author)

University of Chile - Business School ( email )

Diagonal Paraguay 257
Santiago, Chile
Chile

Christian Espinosa

Universidad Diego Portales ( email )

Vergara 210
Santiago, Santiag
Chile

Felix Javier Lopez-Iturriaga

University of Valladolid - Department of Financial Economics and Accounting ( email )

Avda. Valle Esgueva 6
47011 Valladolid
Spain
+34 983 184 395 (Phone)
+34 983 183830 (Fax)

HOME PAGE: http://www2.eco.uva.es/flopez

National Research University Higher School of Economics - International Laboratory of Intangible-driven Economy ( email )

Lebedeva,27
Perm, Perm 614070
Russia

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