Based on a sample of 70 French industrial firms, this paper analyses the market-based performance of diversified firms by including the stock market environment. The findings show that unrelated diversifiers outperform related ones during bearish markets, and that there is no significant...

This study develops and tests a measure of efficient corporate diversification (ECD) that compares the variability of a firm's revenues with the variability of a minimum-variance portfolio of businesses that maintain the same sales growth rate. According to ECD, which incorporates the exposure...