2008 12 98-121 - S&P500 An Empirical Analysis of the Correlation between Diversified Development and the Lucre of Enterprises Based on the Firms of S&P500 Abstract This study according to the geographic regions and the diversity of industrial operation divided into four parts and examined the influence by the multinational locations and cross-business for the profit of firms, including that a corporation was inside or outside U.S. domestic, cross-border for five continents, the total number of crossed five continents and the form of the industrial management. The financial indexes which we measured were that the return on assets (ROA), the return on equity (ROE), the earning per share (EPS) and the risk value (BETA). We adopted enterprises of S&P500 as our samples, in fact we only according to 476 firms with the information during 2006 and applied the least-squares multiple regression model to test. The conclusion was that the first, the capital will develop negatively with diversity. Second, the relationship between we invested only inside the U.S. and the return on equity was negative. Third, the utility in Oceania and Africa was better, but Asia was not. Fourth, the return on equity will increase with the total number of continents we invested. Fifth, industries which were with the single business, vertical combination or horizontal merger were not better than conglomerate industries. Key word: Diversification, Multinational Enterprise (MNE), Cross-Business, Performance Evaluation, S&P500
An Empirical Analysis of the Correlation between Diversified Development and the Lucre of Enterprises Based on the Firms of S&P500 99 (Internal Expansion) (Production Scale) (Economies of Scale) (External Expansion) (direct foreign investment, DFI) (Acquisition) (Merger) (Alliance) (joint venture) 1-1 (Forward Expansion) (Backward Expansion) ( ) ( ) 1-1
100 2008 12
An Empirical Analysis of the Correlation between Diversified Development and the Lucre of Enterprises Based on the Firms of S&P500 101 1-2 1-2
102 2008 12 (Chansog Kim, Kim and Pantzalis, 2001) (DeLong, 2001) (Madura, 2001) 1. 2. 3. 4. (Hymer, 1960) 5. 6. (Kim and Lyn, 1986)
An Empirical Analysis of the Correlation between Diversified Development and the Lucre of Enterprises Based on the Firms of S&P500 103 (Siddhartan and Lall, 1982) (Errunza and Senbet, 1984) (Pantzalisz, 2001) ( 1999) k-w ROE (Fatemi, 1984) (Hughes, Logue and Sweeney,1975) (Bettis and Hall, 1982) ROA( 2000) (Burgman, 1996) (Chkir amd Cosset, 2001)(, 1999) (Doukas and Pantzalis, 1999) (Fatemi, 1988) (Burgman, 1996) (David, Kwok and Baek, 1998) ( 1999) (Dunning, 2000) (Comment and Jarrell, 1995) (John and Ofek,1995) (Chkir amd Cosset, 2001) ( 2004) (Lang and Stulz, 1994) Tobin s q (Lubatkin and Chatterjee, 1994) Tobin s q (Berger and Ofek, 1995)
104 2008 12 (Chansog Kim, Kim and Pantzalis, 2001) (Jensen, 1986) (Stulz, 1990) (Shleifer and Vichny, 1989) (Amihud and Lev, 1981) (Chansog Kim, Kim and Pantzalis, 2001) (DeLong, 2001) S&P 500
An Empirical Analysis of the Correlation between Diversified Development and the Lucre of Enterprises Based on the Firms of S&P500 105 3-1 ROAROEEPSBETA 3-1 Linear Multiple Regression Model OLS 1. 2. OLS 3. ( 2002) (DeLong, 2001) OLS (Chkir, and C. Cosset, J, 2001)(Burgman, T. A, 1996)(Fatemi, 1988)(Bettis, R.A. and W.K. Hall, 1982)(Hughes, J, D. Logue and R. Sweeney, 1975)( 1999)( 2000)
106 2008 12 () 1. ( d Cap DR) y f 1,, = (1) y ij = β 0 ij + β1 ijd1 + β2ijcap + β3ijdr + ε ij (2) yij i =1 ~ 4 ROAROEEPSBETA j =1 ~ 476 j d1 =1 ( ) Cap DR =0 ( ) 2. ( d d, d, d, Cap DR) y f, = (3) 2, 3 4 5 y ij = θ 0 ij + θ1 ijd 2 + θ 2ijd3 + θ3ijd 4 + θ4ijd5 + θ5ijcap + θ6ijdr + ε ij (4) yij i =1 ~ 4 ROAROEEPSBETA j =1 ~ 476 j d2 =1 ( ) d 3 =1 ( ) d 4 =1 ( ) =0 ( ) =0 ( ) =0 ( )
An Empirical Analysis of the Correlation between Diversified Development and the Lucre of Enterprises Based on the Firms of S&P500 107 d 5 =1 ( ) Cap DR 2, d3, d4, d5 =0 ( ) d =1 ( ) d, d =0 ( ) 2 d 3, d 4, 5 3. ( N, Cap DR) y f, = (5) y ij = λ 0 ij + λ1 ijn + λ2ijcap + λ3ijdr + ε ij (6) yij i =1 ~ 4 ROAROEEPSBETA j =1 ~ 476 j N=0 ~ 4 Cap DR 4. ( d d, d, Cap DR) = (7) y f, 6, 7 8 y ij = γ 0 ij + γ 1ijd 6 + γ 2ijd7 + γ 3ijd8 + γ 4ijCap + γ 5ijDR + ε ij (8) yij i =1 ~ 4 ROAROEEPSBETA j =1 ~ 476 j d 6 =1 ( ) =0 ( ) d 7 =1 ( ) =0 ( )
108 2008 12 d8 =1 ( ) =0 ( ) Cap DR 6, d 7, d 8 d =0 ( ) () yij 3-1 3-1 y 1 j y 2 j y 3 j y 4 j ROA (Return on Assets ROE (Return on Equity EPS 1 ) (Earning Per Share 3 ) BETA ( β 4 ) 2 ) 1. { [ + (1- ) ] / ] } 100% (ROA) 2. ( + ) 1. ( / ) 100% 2. ( - ) ( )/ 1. ( Market model ) 2. CAPM ( 3-2) 3-2 Cap DR 5 (Debt-Ratio 6 ) ----- / 2. /
An Empirical Analysis of the Correlation between Diversified Development and the Lucre of Enterprises Based on the Firms of S&P500 109 S&P 500 500 500 S&P 500 S&P 500 S&P 500 500 24 476 COMPUSTAT ( ) Geo Area Code GICS Ind GroupGICS IndustryGICS Sub-Group 1 ROA ( ) ( ) ( ) 2 ROE ( ) ( ) 3 EPS ( ) 4 BETA ( ) (: ) β(beta) (: ) 5 6
110 2008 12 S&P 500 476 4-1 4-1 46% 217 54%259 476 4-1 S&P 500 217 259 4-1 S&P 500 4-2 4-2 100%(476 ) 47.48%(226 ) 32.35%(154 ) 11.97%(57 ) 4.62%(22 ) (G8) 20% 4-2 S&P 500 476 226 154 57 22
An Empirical Analysis of the Correlation between Diversified Development and the Lucre of Enterprises Based on the Firms of S&P500 111 4-2 S&P 500 4-3 4-3 50%(239 ) 17%(81 ) 20%(93 ) 12%(57 ) 1%(6 ) 4-3 S&P 500 0 1 2 3 4 239 81 93 57 6
112 2008 12 4-3 S&P 500 4-4 4-4 50% 60%(289 ) 21%(98 ) 14%(67 ) 5%(22 ) 4-4 S&P 500 98 289 67 22
An Empirical Analysis of the Correlation between Diversified Development and the Lucre of Enterprises Based on the Firms of S&P500 113 4-4 S&P 500 4-5 4-8 S&P 500 4-5 20 70 80 S&P 500 4-6
114 2008 12 2001 2002 2006 1997 2006 S&P 500 4-7 S&P 500 4-8
An Empirical Analysis of the Correlation between Diversified Development and the Lucre of Enterprises Based on the Firms of S&P500 115 4-5 S&P 500 ROA ( ) 13.6272-0.9096-0.0479*** -7.8240 (15.3720) (-1.6243) (-2.9090) (-3.9453) ROE 2.4104-13.1947** 0.1553 33.8663 (0.2624) (-2.2738) (0.9109) (1.648) EPS 0.6271* 0.0034-0.027 5.2509 (1.7381) (0.0148) (-4.0315) (6.5061) Beta 1.4429 0.5409-0.0151 0.2638 (1.4523) (0.8618) (-0.8168) (0.1187) ****** 1%5% 10% t
116 2008 12 ( ) 4-6 S&P 500 ROA 13.0258-0.1806 0.7928 0.9065 0.6173-0.0467*** -8.0915 (12.8649) (-0.2510) (0.9991) (0.9635) (0.4646) (-2.8262) (-4.0605) ROE -2.8787-2.4404 3.7117 14.8605 37.3822*** 0.1515 26.8949 (-0.2762) (-0.3295) (0.4545) (1.5347) (2.7338) (0.8907) (1.3114) EPS 0.8126** 0.0954-0.678** 0.8733** -0.2860-0.0270 5.0843 (1.986) (0.3280) (-2.1142) (2.2970) (-0.5328) (-4.0526) (6.3139) Beta 1.8273-0.3994 0.0238-0.0473 0.0581-0.0151 0.3425 (1.6071) (-0.4942) (0.0267) (-0.0448) (0.0389) (-0.8114) (0.1531) ****** 1%5% 10% t
An Empirical Analysis of the Correlation between Diversified Development and the Lucre of Enterprises Based on the Firms of S&P500 117 4-7 S&P 500 ROA 12.826 0.4304* -0.0471*** -7.9206 (13.2124) (1.7645) (-2.8590) (-4.018) ROE -9.126 6.1913** 0.1668 32.4159 (-0.9075) (2.4504) (0.9781) (1.5875) EPS 0.6978* -0.0429-0.0271 5.2121 (1.7658) (-0.4316) (-4.0493) (6.4949) Beta 1.7361-0.1444-0.0152 0.4269 (1.5942) (-0.5278) (-0.8215) (0.1930) ****** 1%5% 10% t
118 2008 12 ( ) 4-8 S&P 500 ROA 17.2263-4.6412*** -3.4787*** -4.3024*** -0.0504*** -8.2576 (11.6280) (-3.3699) (-2.6933) (-2.994) (-3.0852) (-4.2213) ROE 6.0047-4.1896-5.2992-5.9357 0.145 26.5515 (0.3851) (-0.289) (-0.3893) (-0.3924) (0.8432) (1.289) EPS 2.2334*** -1.5759*** -1.7369*** -1.7862*** -0.0274 5.3156 (3.7102) (-2.816) (-3.3095) (-3.0591) (-4.1275) (6.6876) Beta 1.0748-0.1593 0.6418 0.5090-0.0149 0.5700 (0.6410) (-0.1022) (0.4390) (0.3129) (-0.8083) (0.2574) ****** 1%5% 10% t
An Empirical Analysis of the Correlation between Diversified Development and the Lucre of Enterprises Based on the Firms of S&P500 119 S&P 500 2006
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