Competition from Specialized Firms and the Diversification-Performance Linkage
In this study, we show that the effect of diversification on performance is not homogeneous across industries and explore analytically and empirically the implications of this finding for the diversification literature. Diversified firms perform better in industries with a small number of nondiversified competitors or, equivalently, when specialized firms have a small combined market share, but worse as the presence of specialized firms increases in the industries in which they compete. The results are robust to the use of methods that alleviate the self-selection problem and call for a reassessment of the diversification-performance relationship. Copyright 2008 by The American Finance Association.
Year of publication: |
2008
|
---|---|
Authors: | SANTALO, JUAN ; BECERRA, MANUEL |
Published in: |
Journal of Finance. - American Finance Association - AFA, ISSN 1540-6261. - Vol. 63.2008, 2, p. 851-883
|
Publisher: |
American Finance Association - AFA |
Saved in:
freely available
Saved in favorites
Similar items by person
-
The effect of import competition on product diversification revisited
Becerra, Manuel, (2020)
-
Differentiation and the relationship between product market competition and price discrimination
BECERRA, MANUEL, (2011)
-
The dominance of diversified versus specialized firms across industries
Santalo, Juan, (2006)
- More ...