Dissecting Conglomerate Valuations

Oliver Boguth, Ran Duchin, Mikhail Simutin

Research output: Contribution to journalArticlepeer-review

6 Scopus citations


We develop a new method to estimate Tobin's Qs of conglomerate divisions without relying on standalone firms. Divisional Qs differ considerably from those of standalone firms across industries, over time, and in their sensitivity to economic shocks. The differences are explained by intraconglomerate covariance structures and access to internal capital markets that mitigate external financing frictions. Consequently, the Qs capture variation in the allocation of assets in the economy: within firms through internal capital markets and across focused and diversified firms through diversifying acquisitions. Overall, our method provides opportunities to study the economic mechanisms that explain corporate diversification.

Original languageEnglish (US)
Pages (from-to)1097-1131
Number of pages35
JournalJournal of Finance
Issue number2
StatePublished - Apr 2022
Externally publishedYes

ASJC Scopus subject areas

  • Accounting
  • Finance
  • Economics and Econometrics


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