An Analysis of the Relationship between Product Diversification, Geographical Diversification and Technological Diversification

Building upon a firm-level empirical investigation we conduct a phenomenological analysis of corporate diversification patterns. We take up a more holistic, multilevel approach towards corporate diversifiaction: In our investigation we capture diversification at the output level, at the input level, and at the geographical market level and analyze the relationships between the individual dimensions. The analysis is based on a study on trends in corporate diversification over a fifteen years period ranging from 1983 to 1997. Our sample comprises 46 multinational corporations headquartered all over the triad countries. Based on our three-dimensional view of diversification, we set up three propositions on the relationships between the individual diversification strategies. We then test the correlations between these diversification strategies and derive different phenotypes of corporate diversification. Each phenotype is characterized by a distinctive corporate diversification pattern. From a dynamic perspective these phenotypes translate into paths of evolution of corporate diversification patterns. It can be shown, that are several homogenous groups of sample companies with similar corporate diversification patterns and paths of evolution.