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Changes in diversification among very large food manufacturing firms in the 1980s

Author

Listed:
  • John Y. Ding

    (Department of Economics and Business Administration, Framingham State College)

  • Julie A. Caswell

    (Department of Resource Economics, University of Massachusetts at Amherst)

Abstract

In the 1980s, corporate strategists advised companies to focus on increasing related and decreasing unrelated diversification. We use industry participation counts and entropy diversification indexes based on Trinet data to examine whether restructuring by 10 of the largest food and tobacco manufacturing firms fits this scenario. Indexes measuring related diversification within and outside food and tobacco manufacturing, unrelated diversification, and total diversification lend mixed support to the scenario. While about half of the firms followed the suggested pattern, half did not. These results suggest the importance of focusing on the cumulative impact of changes in a firm's activities on its level of diversification. © 1995 John Wiley & Sons, Inc.

Suggested Citation

  • John Y. Ding & Julie A. Caswell, 1995. "Changes in diversification among very large food manufacturing firms in the 1980s," Agribusiness, John Wiley & Sons, Ltd., vol. 11(6), pages 553-563.
    • Handle: RePEc:wly:agribz:v:11:y:1995:i:6:p:553-563
    DOI: 10.1002/1520-6297(199511/12)11:6<553::AID-AGR2720110607>3.0.CO;2-C
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    References listed on IDEAS

    as
    1. Andrei Shleifer & Robert W. Vishny, 1991. "Takeovers in the '60s and the '80s: Evidence and implications," Strategic Management Journal, Wiley Blackwell, vol. 12(S2), pages 51-59, December.
    2. Vasudevan Ramanujam & P. Varadarajan, 1989. "Research on corporate diversification: A synthesis," Strategic Management Journal, Wiley Blackwell, vol. 10(6), pages 523-551, November.
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