Graduation Year
2018
Date of Submission
5-2018
Document Type
Campus Only Senior Thesis
Degree Name
Bachelor of Arts
Department
Economics
Reader 1
Darren Filson
Terms of Use & License Information
Rights Information
2018 Phoebe Shum
Abstract
Corporate diversification as a corporate strategy has produced inconsistent results for both acquirer and target firms. In the following paper, I study announcement returns from 1,291 diversifying mergers spanning a time period of 57 years from 1950 to 2006 in order to determine what firm and deal characteristics lead to positive combined abnormal returns (CARs). By using an extensive dataset provided by Akbulut and Matsusaka (2010) and a relevant market value information from the Center for Research and Security Practices (CRSP), I find that declining acquirer value is associated with higher combined abnormal returns, while large acquirer size is associated with lower combined abnormal returns.
Recommended Citation
Shum, Phoebe, "An Empirical Test of Optimal Diversification Theories" (2018). CMC Senior Theses. 1902.
https://scholarship.claremont.edu/cmc_theses/1902
This thesis is restricted to the Claremont Colleges current faculty, students, and staff.
