Resource title

Commitment, Product Market Diversity, and Performance - An Intraindustry Analysis

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Resource description

Previous empirical diversification research has largely ignored the combined effect of inputandoutput diversity as drivers of financial performance. In view of this gap, the present paperprovides an empirical analysis of the link between intraindustry commitment, diversity of thefirm’s product market portfolio and performance. We suggest that commitment constrains theability to diversify, and that product market diversity can be evaluated with respect to theextent that increases in diversity lead to increases in coordination costs. Our results suggestthat commitment to physical assets and technology choice drives product and product linediversity. Furthermore, financial performance increases in product diversity and tends todecrease in the number of product lines.

Resource author

Thorbjørn Knudsen, Bo Eriksen

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Resource language

eng

Resource content type

application/pdf

Resource resource URL

http://hdl.handle.net/10398/6896

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