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- W4295137457 abstract "Abstract Exploiting demand shocks from changes in federal government spending, we examine how the organizational structure of a firm affects its investment behavior. Government spending shocks affect the investment of government-dependent conglomerate segments less than matched stand-alone firms. Investment also increases in lower government-dependent segments when other segments within the same firm experience positive demand shocks, indicating cross-subsidization between segments. We further show that this cross-subsidization leads to worse operating performance and increases the diversification discount. Our findings are robust after addressing the endogeneity of government spending." @default.
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- W4295137457 date "2022-09-09" @default.
- W4295137457 modified "2023-09-25" @default.
- W4295137457 title "Cross-Subsidization in Conglomerate Firms: Evidence from Government Spending Shocks" @default.
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- W4295137457 doi "https://doi.org/10.1017/s0022109022001004" @default.
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