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Corporate diversification, coherence and economic performance

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  • Lucia Piscitello

Abstract

Within the diversification literature the concept of corporate coherence has been referred to as the ability of the firm to generate and explore synergies of various types. However, the empirical studies have insofar provided only approaches taking explicitly into account the product/market side of the phenomenon. The present paper operationalizes the concept of corporate coherence as a dynamic interconnectedness between the company's technological competencies and its downstream activities. It also provides some further empirical evidence on the widely discussed relationship between corporate diversification and performance. Specifically, it offers some (albeit rather weak) evidence that economic performance is positively influenced not by the degree of diversification per se, but by the ability of the company to increase its corporate coherence. Copyright 2004, Oxford University Press.

Suggested Citation

  • Lucia Piscitello, 2004. "Corporate diversification, coherence and economic performance," Industrial and Corporate Change, Oxford University Press, vol. 13(5), pages 757-787, October.
  • Handle: RePEc:oup:indcch:v:13:y:2004:i:5:p:757-787
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