This study examines the valuation effect of across-firm diversification as well as within-firm diversification using data of Korean firms listed on KRX during the period over 1994~2003. Although many Korean firms diversify their business through the ownership of other firms, current literature has paid little attention to the valuation effect of across-firm diversification. This study, by considering ownership relations across firms, attempts to examine the valuation effect of across-firm and within-firm diversification. Specifically, the degree of related and unrelated diversification is separatedly measured, employing the Caves' method. The sample period is divided into pre-crisis, crisis, and post-crisis periods in order to reflect the impact of financial crisis in late 1990's. Our results show that the negative valuation effect of within-firm diversification presented by prior studies hold only for unrelated diversification and for pre-crisis period. The valuation effect of within-firm diversification have disappeared since crisis period. However, although there were no valuation effect during pre-crisis and crisis period, across-firm diversification have a significant negative effect on firm value for both related and unrelated diversification during post-crisis period. These results indicate that corporate restructuring enforced and regulations and systems established following financial crisis have a significant impact on corporate strategy and market perception of diversification activities.