The effect of diversification on performance revisited: how the dominance of diversifiers vs. specialists drives the diversification-performance relationship

Becerra, Manuel and Santalo, Juan (2006) The effect of diversification on performance revisited: how the dominance of diversifiers vs. specialists drives the diversification-performance relationship. Management Research, 4 1: 23-34. doi:10.2753/JMR1536-5433040102


Author Becerra, Manuel
Santalo, Juan
Title The effect of diversification on performance revisited: how the dominance of diversifiers vs. specialists drives the diversification-performance relationship
Journal name Management Research   Check publisher's open access policy
ISSN 1536-5433
Publication date 2006-01-01
Sub-type Other
DOI 10.2753/JMR1536-5433040102
Open Access Status Not Open Access
Volume 4
Issue 1
Start page 23
End page 34
Total pages 12
Place of publication Bingley, United Kingdom
Publisher Emerald Group
Language eng
Formatted abstract
In this paper, we argue that the effect of diversification on performance is not homogeneous across industries,
as previously assumed in the literature on diversification in strategy and finance. We provide empirical evidence that some
industries are more friendly environments for diversified firms than for specialists, and vice versa. The implications of this
qualification for the diversification–performance relationship are investigated in this study. The results show that the
number of specialists in an industry is an important moderator of the diversification–performance relationship, and it
determines the existence of a positive, negative, or curvilinear relationship. Diversification has a more negative impact on
performance as the number of specialized firms in the industries in the sample increases. Although we find clear evidence
of the curvilinear relationship between diversification and performance frequently found in strategy research, the relationship
seems to be the result of not accounting for the relative dominance of diversifiers versus specialists in the industries in the
sample
Q-Index Code CX
Q-Index Status Provisional Code
Institutional Status Non-UQ

Document type: Journal Article
Sub-type: Other
Collection: UQ Business School Publications
 
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Created: Sat, 03 Oct 2015, 00:44:33 EST by Susan Peeters on behalf of UQ Business School