{"title":"The effect of the financial crisis on the value of corporate diversification in Spanish firms","authors":"G. de la Fuente, Pilar Velasco","doi":"10.1080/02102412.2014.982385","DOIUrl":null,"url":null,"abstract":"This paper examines the impact of the financial crisis on the value of corporate diversification in a civil law country such as Spain. The financial crisis offers a natural research experiment to test the effect of a credit-constrained environment on benefits and costs emerging from internal capital markets. Using a panel of Spanish listed firms over the 1997–2012 period and controlling for endogeneity, we find that the financial crisis negatively moderates the impact of industrial diversification on a firm’s value. This result supports the idea that financial constraints are likely to exacerbate agency costs within internal capital markets in civil law countries over financial benefits, due to a weaker protection of investors’ rights.","PeriodicalId":45271,"journal":{"name":"Spanish Journal of Finance and Accounting-Revista Espanola De Financiacion Y Contabilidad","volume":"25 1","pages":"1 - 23"},"PeriodicalIF":0.9000,"publicationDate":"2015-01-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"12","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Spanish Journal of Finance and Accounting-Revista Espanola De Financiacion Y Contabilidad","FirstCategoryId":"91","ListUrlMain":"https://doi.org/10.1080/02102412.2014.982385","RegionNum":4,"RegionCategory":"管理学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 12
Abstract
This paper examines the impact of the financial crisis on the value of corporate diversification in a civil law country such as Spain. The financial crisis offers a natural research experiment to test the effect of a credit-constrained environment on benefits and costs emerging from internal capital markets. Using a panel of Spanish listed firms over the 1997–2012 period and controlling for endogeneity, we find that the financial crisis negatively moderates the impact of industrial diversification on a firm’s value. This result supports the idea that financial constraints are likely to exacerbate agency costs within internal capital markets in civil law countries over financial benefits, due to a weaker protection of investors’ rights.
期刊介绍：
The Spanish Journal of Finance and Accounting ( SJFA) is a quarterly academic journal founded in 1972. It aims to publish high quality research papers in accounting and finance. The scope of SJFA covers theoretical and empirical analysis relating to financial markets and institutions, corporate finance, market microstructure, corporate governance, internal and management accounting and a wide spectrum of financial performance and financial reporting, including auditing and public accounting. The Journal welcomes both theoretical and empirical contributions, and in particular, theoretical papers that yield novel testable implications and empirical papers that are theoretically well motivated. The journal is not a suitable outlet for highly abstract mathematical papers or empirical papers with inadequate theoretical motivation. All manuscripts that meet these editorial guidelines are blind reviewed by external reviewers. SJFA sponsors a periodic conference in which selected papers under review are presented and discussed by additional reviewers in order to increase the quality of the papers published in the journal. If accepted for publication, these selected articles are published in the Journal with a special distinction. The Journal welcomes replies and discussions to both published and forthcoming articles. These contributions, if accepted by the editors, may eventually be published jointly with a reply or comment by the authors of the original paper.
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