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Cited by 1,683

The DOI matches its Crossref record; 2 of the 2 references it cites were found in a registry or an index.

The Cost of Diversity: The Diversification Discount and Inefficient Investment

Open access
Rajan, Raghuram, Servaes, Henri, Zingales, Luigi·2000·The Journal of Finance
DOI 10.1111/0022-1082.00200
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Abstract

We model the distortions that internal power struggles can generate in the allocation of resources between divisions of a diversified firm. The model predicts that if divisions are similar in the level of their resources and opportunities, funds will be transferred from divisions with poor opportunities to divisions with good opportunities. When diversity in resources and opportunities increases, however, resources can flow toward the most inefficient division, leading to more inefficient investment and less valuable firms. We test these predictions on a panel of diversified U.S. firms during the period from 1980 to 1993 and find evidence consistent with them.

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Metadata

Authors
Rajan, R., Servaes, H., & Zingales, L.
Venue
The Journal of Finance
Publisher
Wiley
Published
2000-02
Volume
55
Issue
1
Pages
35-80
ISSN
  • 0022-1082 (ISSN-L)
  • 1540-6261
DOI
10.1111/0022-1082.00200
OpenAlex
W3122151187
Cited by
1,683
References
2
FWCI
248.18
Type
journal article
Language
en
Open access
bronze

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CoChat. (2026). Citation check: The Cost of Diversity: The Diversification Discount and Inefficient Investment. https://app.cochat.ai/papers/10.1111/0022-1082.00200
The paper
Rajan, R., Servaes, H., & Zingales, L. (2000). The Cost of Diversity: The Diversification Discount and Inefficient Investment. The Journal of Finance. https://doi.org/10.1111/0022-1082.00200

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Bibliographic data: Semantic Scholar, OpenAlex, Crossref.

Contains information from the Semantic Scholar Academic Graph Datasets, made available under the ODC Attribution License (ODC-BY 1.0).

Semantic Scholar’s data is described in: Kinney, R., et al. (2023). The Semantic Scholar Open Data Platform. arXiv:2301.10140.