search query: @indexterm DIVERSIFICATION / total: 686
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| Author: | Fan, J. P. H. Lang, L. H. P. |
| Title: | The Measurement of Relatedness: An Application to Corporate Diversification |
| Journal: | Journal of Business
2000 : OCT, VOL. 73:4, p. 629-660 |
| Index terms: | MEASUREMENT DIVERSIFICATION COMPANIES INPUT-OUTPUT ANALYSIS |
| Language: | eng |
| Abstract: | In this article, the authors employ commodity flow data in U.S. input-output (IO) tables and construct two IO-based measures, so as to capture (1) interindustry and (2) intersegment (within a diversified firm ) vertical relatedness and complementary. Two businesses are vertically related if one can employ the other's products and services as input for its own production or supply output as the other's input. The paper states that two businesses are complementary if they can procure input jointly or share marketing and distribution. The authors take a few steps to develop the new relatedness measures. The first step is to build on the work of Lemelin (1982) to develop a pair of interindustry relatedness coefficients. The second step is to estimate the intersegment relatedness of firms using the industry-level relatedness coefficients. |
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