The Conglomerate Discount in Germany and the Relationship to Corporate Governance
39 Pages Posted: 19 Dec 2005
Date Written: December 14, 2005
This paper documents the conglomerate discount for all available German firms and the DAX 30 firms in detail. It shows a moderate discount of about 0.06 based on German comparable firms and of about 0.20 for a combined sample of German and European peer groups. I further examine the relationship between the discount and industry concentration as well as uncertainty of valuation. Finally, I document that corporate governance behavior affects the conglomerate discount.
Keywords: conglomerate discount, corporate governance
JEL Classification: G31, G32, G34
Suggested Citation: Suggested Citation