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Multibusiness Firms And Performance In Italy. What Role Does Relatedness Play?

Author

Listed:
  • La Rocca, Maurizio

    (University of Calabria (Italy))

  • La Rocca, Tiziana

    (University of Calabria (Italy))

  • Sánchez Vidal, F. Javier

    (Technical University of Cartagena (Spain))

Abstract

This paper evaluates the effect of diversification strategy on corporate value for a sample of Italian companies. It accounts for both the level of diversification and relatedness components. Empirical analyses show a U-shaped curvilinear relationship between diversification and value. In contrast to the mainstream literature, our results highlight that related diversification has a negative effect, while unrelated diversification is a value-creating strategy. / 0

Suggested Citation

  • La Rocca, Maurizio & La Rocca, Tiziana & Sánchez Vidal, F. Javier, 2018. "Multibusiness Firms And Performance In Italy. What Role Does Relatedness Play?," European Research on Management and Business Economics (ERMBE), Academia Europea de Dirección y Economía de la Empresa (AEDEM), vol. 24(2), pages 63-70.
    • Handle: RePEc:idi:jermbe:v:24:y:2018:i:2:p:63-70
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    File URL: http://www.elsevier.es/en-revista-european-research-on-management-business-489-articulo-multibusiness-firms-performance-in-italy--S244488341830007X
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    Cited by:

    1. F. Javier Sanchez-Vidal & Camino Ramon-Llorens, 2021. "Perception of corruption influences entrepreneurship inside established companies," Papers 2105.11829, arXiv.org.

    More about this item

    Keywords

    Product diversification; Multi-business firm; Relatedness; Firm performance; Firm value; 0;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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