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The dominance of diversified versus specialized firms across industries

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  • Santalo, Juan
  • Becerra, Manuel

Abstract

Some industries are populated primarily by diversified firms, while other industries are dominated by specialized firms, which are present only in such a given industry. In this study, we analyze what factors determine the dominance of diversified versus specialized firms, and its effect on firm performance. In line with transaction cost economics, we show that market concentration and the degree of variability in the diversification pattern of firms in the industry are negatively associated with the importance of the activity accounted by specialized firms across the 720 industries in our study.
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  • Santalo, Juan & Becerra, Manuel, 2006. "The dominance of diversified versus specialized firms across industries," Journal of Business Research, Elsevier, vol. 59(3), pages 335-340, March.
  • Handle: RePEc:eee:jbrese:v:59:y:2006:i:3:p:335-340
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    Cited by:

    1. Ma. Belén Lozano García & Alberto de Miguel Hidalgo & Diana Monserrat Ríos Rodríguez, 2013. "Responsible Diversification: Knowing Enough About Diversification To Do It Responsibly: Motives, Measures And Consequences," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(15), pages 1-19.
    2. Singh, Manohar & Nejadmalayeri, Ali & Mathur, Ike, 2007. "Performance impact of business group affiliation: An analysis of the diversification-performance link in a developing economy," Journal of Business Research, Elsevier, vol. 60(4), pages 339-347, April.
    3. George, Rejie & Kabir, Rezaul, 2012. "Heterogeneity in business groups and the corporate diversification–firm performance relationship," Journal of Business Research, Elsevier, vol. 65(3), pages 412-420.

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