Topic:

The Effect of Institutional Investor Portfolio Diversification on Corporate Diversification

Time&Date: 

13:00-14:30, 4/23/2021 (Friday)

Speaker:

Dr. Seungjoon Oh (Peking University HSBC Business School)

Do institutional investors' portfolio diversification strategies reveal their preferences for a constituent's corporate diversification policies. Estimating investor portfolio diversification using their holdings' return characteristics, we find a negative relationship between portfolio and corporate diversification, robust to a quasi-natural experiment. Our findings are more pronounced when there are more diversified blockholders, managers are highly incentivized, quasi-indexer ownership is higher, and during less volatile and non-crisis periods. Further, diversified owners are associated with highly distinct firms from the perspectives of diversifying acquisitions, non-core asset sales, idiosyncratic risk, and product market similarities. Our findings illustrate how evolving ownership structures reshape the corporate landscape..

Biography:

Seungjoon Oh is an Assistant Professor at Peking University HSBC Business School and a PhD in Finance from the University of Michigan. His research fields are corporate finance, corporate governance, entrepreneurial finance. His papers have been published in Journal of Corporate Finance, Economics Letters, China Economic Review, B.E. Journal of Macroeconomics, and other journals.