interdependencies between different business lines, which increases its coordination costs. The coordination costs may increase faster … results suggest that increasing coordination costs counterbalance the potential synergistic benefits associated with related …Sharing common inputs across business lines can potentially generate synergy that justifies related diversification …

This paper examines the impact of coordination costs and organizational rigidity on the returns to diversification. The … central thesis is that coordination costs offset economies of scope, while organizational rigidity increases coordination … costs, further constraining economies of scope. The empirical tests of this proposition identify the effects of coordination …