Corpoarte diversification in Australia : measurement and causes

Warner, Leigh Robert. (1999). Corpoarte diversification in Australia : measurement and causes Honours Thesis, School of Economics, University of Queensland.

       
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Author Warner, Leigh Robert.
Thesis Title Corpoarte diversification in Australia : measurement and causes
School, Centre or Institute School of Economics
Institution University of Queensland
Publication date 1999
Thesis type Honours Thesis
Total pages 79
Language eng
Subjects 14 Economics
Formatted abstract       Multi-product firms are a prominent feature of all modem economies. The issue of why, and to what extent firms have diversified their operations has been largely ignored in an Australian context. This investigation of 100 Australian publicly listed companies finds that the average level of diversification in my sample increased between 1993 and 1998. This result is despite a roughly equal number of firms increasing as decreasing their initial level of diversification. Overall however I found that there is very little variance in the level of diversification over time at both the industry and firm level.

      Literature on diversification emanates from several disciplines. As such, it suffers from the absence of a unifying theory of diversification. This thesis reviews and evaluates the theoretical literature on diversification. Empirical investigation on the other hand has predominately focused on the relationship between diversification and performance, and in particular whether related diversification is of greater value than unrelated diversification. This study finds evidence supporting the proposition that a related diversification strategy is more profitable than other diversification strategies. Furthermore, it finds evidence in support of agency theories of diversification. In conclusion, the thesis recommends that future empirical research be more focused on directly testing the existing theory rather than the general relationship between diversification and performance.

 
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Created: Wed, 24 Nov 2010, 16:27:00 EST by Muhammad Noman Ali on behalf of The University of Queensland Library