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ECONOMIES OF SCOPE, SYNERGY, AND THE CAPM
Author(s) -
Chang Philip
Publication year - 1988
Publication title -
journal of financial research
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.319
H-Index - 49
eISSN - 1475-6803
pISSN - 0270-2592
DOI - 10.1111/j.1475-6803.1988.tb00086.x
Subject(s) - scope (computer science) , capital asset pricing model , context (archaeology) , economies of scope , business , economics , capital (architecture) , industrial organization , financial economics , microeconomics , economies of scale , paleontology , computer science , biology , programming language , history , archaeology
The purpose of this paper is to integrate the multiproduct theory of the firm into financial theories. The relationship between economies of scope and synergy in conglomerate mergers is formally established in the context of the Capital Asset Pricing Model. It also is shown that a competitive market for corporate control would compete these benefits away.