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We review theory and evidence on corporate diversification, industry structure, and firm strategy from an organizational economics perspective. First, we examine the implications of transaction cost economics (TCE) for diversification decisions. TCE is essentially a theory about the costs of...
Persistent link: https://www.econbiz.de/10012718014
We take a broad product markets approach to examine whether pooled purchasing is a source of value creation in diversifying acquisitions. We find that our proxies for the merging firms' change in purchasing concentration are positively related to the combined wealth effect of merging firms,...
Persistent link: https://www.econbiz.de/10012974499
An extensive empirical literature in strategy and finance studies the performance implications of corporate diversification. Two core debates in the literature concern the existence of a diversification discount and the relative importance of industry relatedness and market structure for the...
Persistent link: https://www.econbiz.de/10011572308
The purpose of this study is to extend the current understanding of business divestiture by investigating its potential for triggering strategic reorientation. A divestiture involving strategic reorientation is here denoted as a strategic business exit, otherwise it is a status quopreserving...
Persistent link: https://www.econbiz.de/10003634737
During the last few decades, the internet and digital technology have fundamentally changed the global music industry. As a consequence, new companies and novel business models have emerged. Spotify, one of the new players in the music industry, has expanded its business activities and grown to...
Persistent link: https://www.econbiz.de/10014022598
This paper examines several dimensions of the relationship between diversification and performance. Specifically, we investigate the link between related and unrelated diversification and performance. We also study the effect of the potential redeployment of ‘plastic' assets on unrelated...
Persistent link: https://www.econbiz.de/10012842565
In this paper we investigate the link between corporate diversification relatedness and economic performance, through the resource plasticity channel. To investigate this, we estimate a dynamic panel on a data set of 2,396 diversified firms from the euro area over the 2010-2017 period. Our...
Persistent link: https://www.econbiz.de/10013403604
Small and medium enterprises, or referred to herein as “SME,” may face possible extinction when falling behind the fierce competition in the marketplaces. Undoubtedly, SMEs business viability is the big question mark. Given the limited current capabilities, SMEs may face substantial hurdles...
Persistent link: https://www.econbiz.de/10012905781
We investigate the relationship between product diversification and performance in the Dutch property-liability (P&L) insurance industry for the period 2007-2018. We employ a two-step approach: we first investigate the drivers of diversification and, as a second step, we investigate the impact...
Persistent link: https://www.econbiz.de/10014032232
Product scope adjustment is a key mechanism through which multi-product firms achieve efficient resource allocations. In this paper, we take a novel perspective to study firms' product scope adjustment behavior through the lens of asset pricing. Using a unique panel scanner data set containing...
Persistent link: https://www.econbiz.de/10012950405