Corporate Diversification and Firm Value in Financial Crisis in Vietnam

Abstract

This research aims at assessing the relationship between corporate diversification and firm value ​​in the time of financial crisis in Vietnam. The research sample consists of 42 Vietnamese non-financial enterprises listed on HoSE from the first quarter of 2008 to the fourth quarter of 2011. We used two methods to estimate panel data regression: (1) Regression Method Pooled OLS and (2) Random Effect Model (REM). The results show that: (1) There is relationship between corporate diversification and firm value, however, corporate diversification should be implemented at either national or industrial level; (2) The financial crisis doesn’t dominanate this relationship and the implementation of diversification will contribute to improving the relative valuation of diversified firms in Vietnam regardless of financial crisis. This empirical result will help Vietnamese enterprises have a reference for considering and making decision related to corporate diversification.
Keywords
Diversification, firm value, financial crisis.
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