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Conglomeration Versus Strategic Focus: Evidence from the Insurance Industry Author info | Abstract | Publisher info | Download info | Related research | Statistics Allen N. Berger
J. David Cummins
Mary A. Weiss
Hongmin Zi
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We provide evidence on the validity of the conglomeration hypothesis versus the strategic focus hypothesis for financial institutions using data on U.S. insurance companies. We distinguish between the hypotheses using profit scope economies, which measures the relative efficiency of joint versus specialized production, taking both costs and revenues into account. The results suggest that the conglomeration hypothesis dominates for some types of financial service providers and the strategic focus hypothesis dominates for other types. This may explain the empirical puzzle of why joint producers and specialists both appear to be competitively viable in the long run.
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Paper provided by Wharton School Center for Financial Institutions, University of Pennsylvania in its series Center for Financial Institutions Working Papers with number
99-29.
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Date of creation: Mar 2000Date of revision:
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Article Berger, Allen N. & Cummins, J. David & Weiss, Mary A. & Zi, Hongmin, 2000.
"Conglomeration versus Strategic Focus: Evidence from the Insurance Industry ,"
Journal of Financial Intermediation ,
Elsevier, vol. 9(4), pages 323-362, October.
[Downloadable!] (restricted) Paper Find related papers by JEL classification: G22 - Financial Economics - - Financial Institutions and Services - - - Insurance; Insurance Companies G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance L23 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Organization of Production L89 - Industrial Organization - - Industry Studies: Services - - - Other
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references Cited by : (explanations , Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile , click on "citations" and make appropriate adjustments.)
J. David Cummins & Georges Dionne & Robert Gagné & Abdelhakim Nouira, 2006.
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Dean Amel & Colleen Barnes & Fabio Panetta & Carmelo Salleo, 2002.
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Santiago Carbó Valverde & Francisco Rodríguez Fernández, 2005.
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05/01, Department of Economic Theory and Economic History of the University of Granada..
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0626, CIRPEE.
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