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In this work I review theories and empirical studies on corporate diversification by means of which I reveal numerous factors influencing a firm´s decision to diversify as well as the diversification´s effect on firm value. In addition to driving forces, I identify a number of firm- and industry-specific prerequisites for corporate diversification. Obviously, the trends in diversification strategy have changed over time and so have also empirical conclusions about the diversification´s effect on firm value. Even though arguments in favor of the diversification discount seem to prevail, recently, there has been risen a vast amount of critique and evidence questioning this conclusion. Apparently, diversification per se might be considered value-maximizing strategy. Yet, diversification may result in a decrease in firm value conditional upon several factors - scale and scope of diversification, expansion strategy, firm structure as well as current business environment.

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Simona Jabconová, born in 1990 in Kosice, Slovakia, studied International Business Administration at the University of Vienna in Austria from 2009 till 2015 when she graduated with a major in Corporate Finance and Operations Research.

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