Abstract
The relationship between corporate focus and firm value is frequently discussed in the financial literature. Most often, focused companies are valued at a premium in comparison to diversified firms. In this study, focus within a single line of business, rather than across multiple businesses, is analysed. An unbalanced panel dataset covering 39 Australian non-stapled Listed Property Trusts (LPTs) from 1992 through 2003 is observed. Focus over property type (retail, office, industrial and hotel) is significantly positively related to LPT value, while the corresponding connection measured over geographical regions is negative. After dividing the time period into two sub-periods (a) 1992–1997 and (b) 1998–2003, the significance disappears for property type focus over the second period, but remains for the first period. Focus over regions is negatively related to value for both sub-periods. These relationships remain after controlling for share market liquidity, with dollar trading volume used as a proxy.
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