The Berger–Ofek Diversification Discount Is Just Poor Firm Matching

We appreciate comments received from Valentin Dimitrov, Alex Edmans, Karl Lins, Gordon Phillips, Jeff Pontiff, James Ryans, Denis Sosyura, Belén Villalonga, and participants at the 2012 NBER Corporate Finance Meeting, the 2012 FMA Annual Meeting, the 2013 EFA Annual Meeting, the 2014 AAA Annual Meeting, the 2015 WFA Annual Meeting, the All-Georgia Conference at the Atlanta Fed, the 2016 SFA Annual Meeting, the 2018 AAA FARS meeting, and seminars held at the University of Massachusetts at Amherst, Lehigh University, the University of Texas at Austin, Rice University, Rutgers University, the University of Florida, the University of Georgia, and Seton Hall University. This paper previously circulated as “A Manufactured Diversification Discount”.