Does Number of Listed-Subsidiaries in Business Group matter in Diversification Issue?

• Main Authors: Tsung-Fu Tsai, 蔡宗甫
• Other Authors: 陳聖賢
• Format: Others
• Language: en_US
• Published: 2011
• Online Access: http://ndltd.ncl.edu.tw/handle/70796053346748511704

碩士 === 國立臺灣大學 === 財務金融學研究所 === 99 === This article is to study the relationship between business group affiliates value and the listed level of business group. Prior researches documented diversification discount really exist when firms lead on diversification; besides, when segments of the diversified firm increase, the marginal discount is significant. However, in emerging countries, it’s difficult to discover a firm with diversification but a business group, especially Taiwan. If we take a business group as a firm, will diversification discounts still exist? Will the phenomenon of marginal discounts also present in Taiwan firms? If the answers are yes, will the discount be migrated when the business group has higher listed ratio? We try to use this article to discover the answer. We gathered the data from Taiwan Economic Journal (TEJ). With the limitation on dataset, we only choose year 2002 firms’ performance as our sample. We detect that Taiwan market also exists diversification discount; however, when dividing the firms by trading location, only unlisted public firms have diversification discount. Besides, we further separate the firms by belonged business group listed ratio. We find out that affiliates in low listed group have better excess premium than those in high listed group; but in REG market the story conversed. No matter in high listed or low listed group, affiliates performances have no significantly economical explanation, which is not consistent with US conglomerates’ performance.。