Corporate Diversification

Is corporate diversification (operating as a conglomerate in several different business lines) consistent with 

shareholder wealth maximization?  Or what types of problems can arise?

FIN 751

Research Paper

This project will require you to research a topic in corporate finance. I provide you with some suggestions of topics later in this document, but you are free to choose another topic (it needs to be approved by me).

The purpose of the research assignment is twofold. First, it is to introduce the student to the wide selection of electronic research facilities available from the library. The second objective is for the student to gain an in-depth knowledge of a topic related to the course that is not covered thoroughly by the lecture or the textbook.

Important Dates

Week 2: Your topic and a brief outline

Week 7: Research paper is due

Research Paper Structure

a. Introduction to the topic you chose, definitions, and why the topic is important in corporate finance / financial management.

b. A review of some of the literature related to your topic. This should include a review of both theories (theories predict how individuals will behave) and empirical studies (empirical analysis uses data to test if the prediction of the theory are supported).

· For example, let’s say you choose to write about dividends. There is the agency theory, signaling theory, and others. You should discuss these theories, and then also discuss some papers that attempted to “test” if the data supports these theories.

c. Your assessment of the literature, including your opinions after reading the existing arguments.

· For example, do you feel the literature is missing something? Which theories do you tend to agree with the most? Have you had any firsthand experiences or opinions on the topic? Do you have any predictions that were not covered in the literature you read?

d. Brief concluding remarks.

e. References (here is a link for APA formatting:

https://owl.english.purdue.edu/owl/resource/560/1/

The content of the report matters much more than the length. As a very general guideline, the paper should be around 10 pages including references. If you turn in 4 pages, you did too little. If you turn in 20 pages, you did too much.

Rubric

The research project is worth 20% of your total course grade. The project will be worth 100 points, which are broken down as follows.

5 points: On time submission of the outline and the final project.

10 points: Exposition: including the structure of the paper, grammar, punctuation, clarity, references, etc.

65 points: Literature Review: your writing on the existing theories and empirical papers related to your topic.

20 points: Original thought: your interpretation of the existing literature, your ideas and opinions, the reasoning that led to your ideas, your hypotheses, etc.

· Note: I am looking for critical thinking, connecting concepts to formulate new ideas, etc.

Research Paper Potential Topic List

(Remember, you can choose a different topic, but I need to approve it).

Note: The bullet points within each topic are just for your guidance. You can choose your own path within these topics.

Corporate Social Responsibility (CSR)

· Do CSR activities aid in shareholder wealth maximization? What are arguments for and against firm’s participating in CSR activities?

Shareholder Activism

· Do shareholder activists alleviate the agency problem? Or do they promote short-term fixes too problems and distract from long-term value creation.

Corporate Diversification

· Is corporate diversification (operating as a conglomerate in several different business lines) consistent with shareholder wealth maximization? Or what types of problems can arise?

Illegal Insider Trading

· Are there any potential benefits to allowing insider trading?

Dividends and / or Repurchases

· I already gave you enough hints in an earlier section.

Executive Compensation

· Is CEO pay too excessive?

Corporate Tax Reform

Resources

You can use any reputable sources. Some recommendations:

·

https://www.google.com/

a. Google key words related to your topic for access to many free materials and sift through them, refining your search terms along the way. For example, if you start with “illegal insider trading”, but your interest shifts to potential benefits of insider trading, google “are there any benefits of insider trading?”

·

https://scholar.google.com/

a. For academic journal articles, use this google scholar link. Then you can access the articles, if available, through the STU Library website.

Newpapers, Magazines, Academic Journals

Wall Street Journal

Economist

Business Week

Fortune

Journal of Finance

Journal of Small Business Finance

Journal of Case Management

Journal of Financial Planning

Journal of Portfolio Management

Journal of Accounting, Auditing, and Finance

Journal of Business

Journal of Accounting Research

Journal of Political Economy

Journal of Financial Services Research

Journal of Financial Economics

Journal of Banking and Finance

Journal of Financial and Quantitative Analysis

The Financial Review

Review of Business and Economics Research

Akron Business and Economic Review

International Review of Economics & Business

National Tax Journal

Financial Executive

The Review of Economics and Statistics

California Management Review Corporate Cash Flow

The American Economic Review

The European Economic Review

International Economic Review

Financial Management

Global Finance

Management Decision