search query: @indexterm diversification / total: 686
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| Author: | Markides, C. C. |
| Title: | The economic characteristics of de-diversifying firms. |
| Journal: | British Journal of Management
1992 : JUN, VOL. 3:2, p. 91-100 |
| Index terms: | FIRM (THEORY OF) DIVERSIFICATION ECONOMICS |
| Language: | eng |
| Abstract: | To provide some evidence on the nature of the refocusing firms, a random sample of 201 Fortune 500 firms was examined in order to isolate the characteristics of those firms that refocused in the period 1981-1985, as opposed to those firms that did not refocus. It was found that (1) relative to their industry counterparts, the refocusing firms were characterized by high diversification and poor performance; (2) a firm was more likely to refocus the higher the profitability , size, concentration ratio and advertising intensity of its core industry; (3) the higher the R&D intensity of the firm's core business, the lower the likelihood that the firm would refocus; (4) every firm has an intrinsic limit to how much it can diversify: the firms that diversify beyond this limit run into some form of diseconomy. |
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