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Impacts of Media Conglomerates' Dual Diversification on Financial Performance


  • Jaemin Jung
  • Sylvia Chan-Olmsted


This study examines the impact of media firms' diversification on their financial performance based on the product and geographical diversification activities and performance of the top 26 media firms from 1991 to 2002. The empirical results generally indicate that related product and international diversification contributes to better financial performance. However, excessive diversification, which leads to a high degree of unrelated diversification, might decrease performance. There also appears to be a hurdle level for diversification, prior to which expanding businesses in product and international markets may need considerable investment and produce negative cash flow. Beyond that threshold, dual diversification significantly contributes to increases in cash flow.

Suggested Citation

  • Jaemin Jung & Sylvia Chan-Olmsted, 2005. "Impacts of Media Conglomerates' Dual Diversification on Financial Performance," Journal of Media Economics, Taylor & Francis Journals, vol. 18(3), pages 183-202.
  • Handle: RePEc:taf:jmedec:v:18:y:2005:i:3:p:183-202 DOI: 10.1207/s15327736me1803_2

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    References listed on IDEAS

    1. Jeffrey K. MacKie-Mason & Hal Varian, 1994. "Economic FAQs About the Internet," Journal of Economic Perspectives, American Economic Association, vol. 8(3), pages 75-96, Summer.
    2. Shenker, Scott & Clark, David & Estrin, Deborah & Herzog, Shai, 1996. "Pricing in computer networks: Reshaping the research agenda," Telecommunications Policy, Elsevier, vol. 20(3), pages 183-201, April.
    3. Bodnar & Peter Dilworth & Salvatore Iacono, Judith, 1988. "Cross-sectional analysis of residential telephone subscription in Canada," Information Economics and Policy, Elsevier, vol. 3(4), pages 355-378.
    4. MacKie-Mason, J.K. & Varian, H.L., 1993. "Some Economists of the Internet," Papers 93-16, Michigan - Center for Research on Economic & Social Theory.
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