Industrial De-Diversification and its Consequences for Productivity
Due in large part to intense takeover activity during the 1980s, the extent of American firms' industrial diversification declined significantly during the second half of the decade. The mean number of industries in which firms operated declined 14 percent, and the fraction of single-industry firms increased 54 percent. Firms that were "born" during the period were much less diversified than those that "died", and "continuing" firms reduced the number of industries in which they operated. using plant-level Census Bureau data, we show that productivity is inversely related to the degree of diversification: holding constant the number of the parent firm's plants, the greater the number of industries in which the parent operates, the lower the productivity of its plants. Hence de-diversification is one of the means by which recent takeovers have contributed to U.S. productivity growth. We also find that the effectiveness of regulations governing disclosure by companies of financial information for their industry segments was low when they were introduced in the 1970s and has been declining ever since.
|Date of creation:||Jan 1990|
|Date of revision:|
|Publication status:||published as Journal of Economic Behavior and Organization, December 1992, forthcoming.|
|Contact details of provider:|| Postal: |
Web page: http://www.nber.org
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Lichtenberg, F.R. & Siegel, D., 1989.
"The Effect Of Takeovers On The Employment And Wages Of Central-Office And Other Personnel,"
fb-_89-05, Columbia - Graduate School of Business.
- Frank R Lichtenberg & Donald Siegel, 1989. "The Effect Of Takeovers On The Employment And Wages Of Central-Office And Other Personnel," Working Papers 89-3, Center for Economic Studies, U.S. Census Bureau.
- Frank Lichtenberg & Donald Siegel, 1989. "The Effect of Takeovers on the Employment and Wages of Central-Office and Other Personnel," NBER Working Papers 2895, National Bureau of Economic Research, Inc.
- Randall Morck & Andrei Shleifer & Robert W. Vishny, 1989.
"Do Managerial Objectives Drive Bad Acquisitions?,"
NBER Working Papers
3000, National Bureau of Economic Research, Inc.
- Devra L. Golbe & Lawrence J. White, 1988. "A Time-Series Analysis of Mergers and Acquisitions in the U.S. Economy," NBER Chapters, in: Corporate Takeovers: Causes and Consequences, pages 265-310 National Bureau of Economic Research, Inc.
- Frank R. Lichtenberg & Donald Siegel, 1989.
"The Impact of R&D Investment On Productivity - New Evidence Using Linked R&D-LRD Data,"
NBER Working Papers
2901, National Bureau of Economic Research, Inc.
- Lichtenberg, Frank R & Siegel, Donald, 1991. "The Impact of R&D Investment on Productivity--New Evidence Using Linked R&D-LRD Data," Economic Inquiry, Western Economic Association International, vol. 29(2), pages 203-29, April.
- Frank R. Lichtenberg & Donald Siegel, 1987. "Productivity and Changes in Ownership of Manufactoring Plants," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 18(3), pages 643-684.
- Lichtenberg, Frank R. & Siegel, Donald, 1990.
"The effects of leveraged buyouts on productivity and related aspects of firm behavior,"
Journal of Financial Economics,
Elsevier, vol. 27(1), pages 165-194, September.
- Frank R. Lichtenberg & Donald Siegel, 1989. "The Effects of Leveraged Buyouts on Productivity and Related Aspects of Firm Behavior," NBER Working Papers 3022, National Bureau of Economic Research, Inc.
- Frank R Lichtenberg & Donald Siegel, 1989. "The Effects Of Leveraged Buyouts On Productivity And Related Aspects Of Firm Behavior," Working Papers 89-5, Center for Economic Studies, U.S. Census Bureau.
- Wernerfelt, Birger & Montgomery, Cynthia A, 1988. "Tobin's q and the Importance of Focus in Firm Performance," American Economic Review, American Economic Association, vol. 78(1), pages 246-50, March.
- Lichtenberg, Frank R, 1988. "Estimation of the Internal Adjustment Costs Model Using Longitudinal Establishment Data," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 421-30, August.
- Amar Bhide, 1989. "The Causes And Consequences Of Hostile Takeovers," Journal of Applied Corporate Finance, Morgan Stanley, vol. 2(2), pages 36-59.
When requesting a correction, please mention this item's handle: RePEc:nbr:nberwo:3231. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.