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The Productivity Effects Of Corporate Diversification

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  • Germán Bet

Abstract

This paper studies the productivity effects of corporate diversification. I estimate a model that allows diversification decisions to affect future productivity. I apply the model to a panel of U.S. manufacturing firms to measure the impact of diversification on productivity. My estimates suggest that diversification plays a key role in explaining differences in productivity across productive units and time. The average productivity effect of diversification is estimated to be positive at the productive unit level. However, the effect varies considerably across productive units and sectors of activity, depending crucially on already attained productivity.

Suggested Citation

  • Germán Bet, 2024. "The Productivity Effects Of Corporate Diversification," Journal of Industrial Economics, Wiley Blackwell, vol. 72(2), pages 685-728, June.
    • Handle: RePEc:bla:jindec:v:72:y:2024:i:2:p:685-728
    DOI: 10.1111/joie.12370
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    References listed on IDEAS

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