Covid-19: Corporate diversification and post-crash returns

Yerzhan Tokbolat; Hang Le

doi:10.1016/j.frl.2021.102501

Covid-19: Corporate diversification and post-crash returns

Yerzhan Tokbolat
, Hang Le

Queen's Business School (QBS)

Research output: Contribution to journal › Article › peer-review

4 Citations (Scopus)

154 Downloads (Pure)

Abstract

This paper examines the impact of corporate diversification on stock returns during and after the market crash caused by Covid-19. Using regression and survival analyses, we find that diversified firms experience worse returns and slower improvement in stock prices than focused firms. However, diversified firms trading at diversification premium have better returns and faster recovery compared to those trading at discount. Our findings presented here can be relevant to academics and industry professionals in their understanding of the role of corporate diversification in difficult times.

Original language	English
Article number	102501
Journal	Finance Research Letters
Volume	46
Issue number	Part B
Early online date	11 Apr 2022
DOIs	https://doi.org/10.1016/j.frl.2021.102501
Publication status	Published - May 2022

Keywords

Covid-19
stock market crash
excess value
corporate diversification
survival analysis

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10.1016/j.frl.2021.102501Licence: Unspecified

Covid-19: Corporate diversification and post-crash returns
Copyright 2021 Elsevier. This manuscript is distributed under a Creative Commons Attribution-NonCommercial-NoDerivs License (https://creativecommons.org/licenses/by-nc-nd/4.0/), which permits distribution and reproduction for non-commercial purposes, provided the author and source are cited.
Accepted author manuscript, 446 KBLicence: CC BY-NC-ND

Cite this

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Covid-19: Corporate diversification and post-crash returns

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Keywords

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