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Corporate diversification, vertical integration, and internal capital markets: A cross-country study

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Abstract

Abstract and Key Results

  1. ▪

    In this paper I test the theory that internal capital markets are a motivation for both corporate diversification and vertical integration. I use a sample of 1560 firms from 39 countries.

  2. ▪

    Using this data I also test theories about vertical integration and capital market development. I also test agency cost and taxation theories of diversification and vertical integration.

  3. ▪

    I find a significant and negative relationship between corporate diversification and capital market development

  4. ▪

    I find a significant and positive relationship between vertical integration and capital market development.

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Authors and Affiliations

  1. Touro University International, Cypress, CA, USA

    Joshua D. Shackman

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Shackman, J.D. Corporate diversification, vertical integration, and internal capital markets: A cross-country study. MANAGE. INT. REV. 47, 479–504 (2007). https://doi.org/10.1007/s11575-007-0027-z

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  • DOI: https://doi.org/10.1007/s11575-007-0027-z

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