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Product Diversification and Stability of Employment and Sales: First Evidence from German Manufacturing Firms


  • Nils Braakmann

    () (Institute of Economics, University of Lüneburg)

  • Joachim Wagner

    () (Institute of Economics, University of Lüneburg)


We use a unique rich newly built data set for German manufacturing enterprises to investigate the relationship between product diversification and the stability of sales and employment. We find that contrary to portfolio theoretic considerations more diversified firms exhibit a higher variability of sales and employment. However, the effects are negligibly small from an economics point of view.

Suggested Citation

  • Nils Braakmann & Joachim Wagner, 2009. "Product Diversification and Stability of Employment and Sales: First Evidence from German Manufacturing Firms," Working Paper Series in Economics 120, University of Lüneburg, Institute of Economics.
  • Handle: RePEc:lue:wpaper:120

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    References listed on IDEAS

    1. Martin Gornig & Bernd Görzig, 2007. "Verstärkte Spezialisierung deutscher Unternehmen," DIW Wochenbericht, DIW Berlin, German Institute for Economic Research, vol. 74(20), pages 333-335.
    2. Hirsch, Seev & Lev, Baruch, 1971. "Sales Stabilization Through Export Diversification," The Review of Economics and Statistics, MIT Press, vol. 53(3), pages 270-277, August.
    3. Bernd Görzig & Martin Gornig & Ramona Pohl, 2007. "Spezialisierung und Unternehmenserfolg im verarbeitenden Gewerbe Deutschlands," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 76(3), pages 43-58.
    4. Nils Braakmann & Joachim Wagner, 2009. "Product Differentiation and Profitability in German Manufacturing Firms," Working Paper Series in Economics 115, University of Lüneburg, Institute of Economics.
    5. Ernest H. Hall Jr., 1995. "Corporate Diversification and Perfor Mance: An Investigation of Causality," Australian Journal of Management, Australian School of Business, vol. 20(1), pages 25-42, June.
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    Cited by:

    1. Joachim Wagner & John Philipp Weche Gelübcke, 2012. "Foreign Ownership and Firm Survival: First Evidence for Enterprises in Germany," International Economics, CEPII research center, issue 132, pages 117-139.
    2. Wagner Joachim, 2009. "Produktdifferenzierung in deutschen Industrieunternehmen 1995 – 2004: Ausmaß und Bestimmungsgründe / Product Diversification in German Manufacturing Enterprises 1995 – 2004: Extent and Determinants," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 229(5), pages 615-642, October.
    3. Joachim Wagner, 2013. "Exports, imports and firm survival: first evidence for manufacturing enterprises in Germany," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 149(1), pages 113-130, March.
    4. Schwiebert, Jörg & Wagner, Joachim, 2015. "A Generalized Two-Part Model for Fractional Response Variables with Excess Zeros," Annual Conference 2015 (Muenster): Economic Development - Theory and Policy 113059, Verein für Socialpolitik / German Economic Association.

    More about this item


    Product diversification; stability; variability; Germany;

    JEL classification:

    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General

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