Dominik Nußmann comprehensively analyzes the coinsurance effect of corporate diversification by
first providing a structured review of all relevant findings presented in the financial
economics and accounting literature. Based on this review he examines important accounting and
economic implications of the coinsurance effect by means of two comprehensive empirical
analyses. In particular he finds that diversified firms benefit from coinsurance through
financial as well as accounting synergies which entail considerable value-enhancing potentials.
