The cost of capital effect of M&A transactions: Disentangling coinsurance from the diversification discount
研究企业多元化中共同保险降低资本成本与内部资本市场低效提高资本成本的双重效应，基于1985-2014年美国并购数据，发现平均资本成本净降29个基点。
Abstract This study argues that in corporate diversification there is a bright side (coinsurance effect) and a dark side (diversification discount). While diversification might reduce systematic risk by its impact on the cost of financial distress, it might increase systematic risk because of inefficient cross‐subsidization at the same time. Building on an extension of the model of Hann, Ogneva, and Ozbas ( ), we analyze mergers and acquisitions in the US over the period 1985 to 2014. We find the coinsurance effect to decrease the cost of capital by 36 basis points for the average firm. However, at the same time, we observe a 7 basis points increase in the cost of capital related to the inefficiency of the firm's internal capital market. Both effects are statistically significant and robust to endogeneity concerns, different empirical specifications, and variable measurement.