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Covid-19: Corporate diversification and post-crash returns

Tokbolat, Yerzhan; Le, Hang

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Authors

Yerzhan Tokbolat

HANG LE HANG.LE@NOTTINGHAM.AC.UK
Associate Professor



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.

Journal Article Type Article
Acceptance Date Oct 14, 2021
Online Publication Date Oct 16, 2021
Publication Date 2022-05
Deposit Date Mar 1, 2022
Publicly Available Date Oct 17, 2022
Journal Finance Research Letters
Print ISSN 1544-6123
Peer Reviewed Peer Reviewed
Volume 46
Issue Part B
Article Number 102501
DOI https://doi.org/10.1016/j.frl.2021.102501
Public URL https://nottingham-repository.worktribe.com/output/7530777
Publisher URL https://www.sciencedirect.com/science/article/pii/S1544612321004761?via%3Dihub

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