2024/11/04 by GERARD HOBERG, Gerard Hoberg, GORDON M. PHILLIPS +1 · 1 citation
Business, Management and Accounting · Economics, Econometrics and Finance · #Corporate Finance and Governance #Firm Innovation and Growth #Italy: Economic History and Contemporary Issues
paper · pdf · doi:10.1111/jofi.13400
ABSTRACT We provide evidence using firm 10‐Ks that over the past 30 years, U.S. firms have expanded their scope of operations. Increases in scope were achieved largely without increasing traditional operating segments. Scope expansion significantly increases valuation and is realized primarily through acquisitions and investment in R&D, but not through capital expenditures. Traditional concentration ratios do not capture this expansion of scope. Our findings point to a new type of firm that increases scope through related expansion, which is highly valued by the market.