The effect of diversification on firm value : publicly listed firms in the Netherlands and Germany post-financial crisis

This thesis investigates the influence diversification on firm value of publicly listed firms in Germany and the Netherlands. This influence is investigated by examining the relation between the number of industries a firm is active in and its Tobin’s Q, EV and Adjusted Q. Diversification was found to have a statistically negative influence on EV and the adjusted Q valuation measures. For Tobin’s Q a statistically insignificant diversification premium was found when using a diversification dummy and a statistically insignificant diversification discount was found when looking at the number of segments in which a firm is active.