MAPPING VALUE GROWTH IN COMPLEX PORTFOLIOS

Abstract

RUNNING A LARGE, MULTI‐BUSINESS COMPANY HAS never been harder than it is today. For one thing, investors tend to accord higher multiples to “pure play” firms, in part because they understand what they're buying. In a 1998 study, for example, Raghuram Rajan, Henri Servaes, and Luigi Zingales found that the shares of highly diversified firms traded, on average, for almost 10% less than those of focused firms during the 1980s and early 1990s (National Bureau of Economic Research Working Paper No. 6368).

Citation

Balaban, R. and Rothschild, P. (2002), "MAPPING VALUE GROWTH IN COMPLEX PORTFOLIOS", Journal of Business Strategy, Vol. 23 No. 1, pp. 35-39. https://doi.org/10.1108/eb040222