IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v59y2006i3p335-340.html
   My bibliography  Save this article

The dominance of diversified versus specialized firms across industries

Author

Listed:
  • Santalo, Juan
  • Becerra, Manuel

Abstract

Some industries are populated primarily by diversified firms, while other industries are dominated by specialized firms, which are present only in such a given industry. In this study, we analyze what factors determine the dominance of diversified versus specialized firms, and its effect on firm performance. In line with transaction cost economics, we show that market concentration and the degree of variability in the diversification pattern of firms in the industry are negatively associated with the importance of the activity accounted by specialized firms across the 720 industries in our study.
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Santalo, Juan & Becerra, Manuel, 2006. "The dominance of diversified versus specialized firms across industries," Journal of Business Research, Elsevier, vol. 59(3), pages 335-340, March.
    • Handle: RePEc:eee:jbrese:v:59:y:2006:i:3:p:335-340
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148-2963(05)00124-4
    Download Restriction: Full text for ScienceDirect subscribers only
    ---><---

    As the access to this document is restricted, you may want to look for a different version below or search for a different version of it.

    Other versions of this item:

    References listed on IDEAS

    as
    1. David J. Teece, 2003. "Towards an Economic Theory of the Multiproduct Firm," World Scientific Book Chapters, in: Essays In Technology Management And Policy Selected Papers of David J Teece, chapter 15, pages 419-446, World Scientific Publishing Co. Pte. Ltd..
    2. Meyer, Margaret & Milgrom, Paul & Roberts, John, 1992. "Organizational Prospects, Influence Costs, and Ownership Changes," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 1(1), pages 9-35, Spring.
    3. Jose Manuel Campa & Simi Kedia, 2002. "Explaining the Diversification Discount," Journal of Finance, American Finance Association, vol. 57(4), pages 1731-1762, August.
    4. Hart, Oliver, 1995. "Firms, Contracts, and Financial Structure," OUP Catalogue, Oxford University Press, number 9780198288817.
    5. Klein, Benjamin & Crawford, Robert G & Alchian, Armen A, 1978. "Vertical Integration, Appropriable Rents, and the Competitive Contracting Process," Journal of Law and Economics, University of Chicago Press, vol. 21(2), pages 297-326, October.
    6. Teece, David J., 1980. "Economies of scope and the scope of the enterprise," Journal of Economic Behavior & Organization, Elsevier, vol. 1(3), pages 223-247, September.
    7. George J. Stigler, 1951. "The Division of Labor is Limited by the Extent of the Market," Journal of Political Economy, University of Chicago Press, vol. 59(3), pages 185-185.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Ma. Belén Lozano García & Alberto de Miguel Hidalgo & Diana Monserrat Ríos Rodríguez, 2013. "Responsible Diversification: Knowing Enough About Diversification To Do It Responsibly: Motives, Measures And Consequences," Annales Universitatis Apulensis Series Oeconomica, Faculty of Sciences, "1 Decembrie 1918" University, Alba Iulia, vol. 1(15), pages 1-19.
    2. Singh, Manohar & Nejadmalayeri, Ali & Mathur, Ike, 2007. "Performance impact of business group affiliation: An analysis of the diversification-performance link in a developing economy," Journal of Business Research, Elsevier, vol. 60(4), pages 339-347, April.
    3. Geoffrey Martin & Luis R. Gómez–Mejía & Pascual Berrone & Marianna Makri, 2017. "Conflict between Controlling Family Owners and Minority Shareholders: Much Ado about Nothing?," Entrepreneurship Theory and Practice, , vol. 41(6), pages 999-1027, November.
    4. Manuel Villasalero, 2018. "Multi-Business Firms, Knowledge Flows and Intra-Network Open Innovations," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(1), pages 162-179, March.
    5. Roma, Paolo & Vasi, Maria, 2019. "Diversification and performance in the mobile app market: The role of the platform ecosystem," Technological Forecasting and Social Change, Elsevier, vol. 147(C), pages 123-139.
    6. Hoskins, Jake D. & Carson, Stephen J., 2022. "Industry conditions, market share, and the firm’s ability to derive business-line profitability from diverse technological portfolios," Journal of Business Research, Elsevier, vol. 149(C), pages 178-192.
    7. Saptarshi Purkayastha, 2013. "Diversification Strategy and Firm Performance: Evidence from Indian Manufacturing Firms," Global Business Review, International Management Institute, vol. 14(1), pages 1-23, February.
    8. George, Rejie & Kabir, Rezaul, 2012. "Heterogeneity in business groups and the corporate diversification–firm performance relationship," Journal of Business Research, Elsevier, vol. 65(3), pages 412-420.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kim, Jongwook & Mahoney, Joseph T., 2008. "A Strategic Theory of the Firm as a Nexus of Incomplete Contracts: A Property Rights Approach," Working Papers 08-0108, University of Illinois at Urbana-Champaign, College of Business.
    2. Saptarshi Purkayastha, 2013. "Diversification Strategy and Firm Performance: Evidence from Indian Manufacturing Firms," Global Business Review, International Management Institute, vol. 14(1), pages 1-23, February.
    3. Gatzer, Sebastian & Hoang, Daniel & Ruckes, Martin, 2015. "Internal Capital Markets and Diversified Firms: Theory and Practice," EconStor Preprints 169432, ZBW - Leibniz Information Centre for Economics.
    4. Elif AKBEN SELCUK, 2014. "Corporate Diversification, Group Affiliation and Firm Value: Evidence From Turkey," Journal of BRSA Banking and Financial Markets, Banking Regulation and Supervision Agency, vol. 8(2), pages 151-174.
    5. Ly, Kim Cuong & Liu, Hong & Opong, Kwaku, 2017. "Who acquires whom among stand-alone commercial banks and bank holding company affiliates?," International Review of Financial Analysis, Elsevier, vol. 54(C), pages 144-158.
    6. Holger Mueller, 2016. "Reallocation of Capital and Labor within Firms," Swiss Journal of Economics and Statistics, Springer;Swiss Society of Economics and Statistics, vol. 152(4), pages 289-303, October.
    7. Williamson, Oliver, 2009. "The Theory of the Firm as Governance Structure: From Choice to Contract," Ekonomicheskaya Politika / Economic Policy, Russian Presidential Academy of National Economy and Public Administration, vol. 6, pages 111-134, December.
    8. Minkler, Lanse, 2004. "Shirking and motivations in firms: survey evidence on worker attitudes," International Journal of Industrial Organization, Elsevier, vol. 22(6), pages 863-884, June.
    9. Richard N. Langlois & Nicolai J. Foss, 1999. "Capabilities and Governance: The Rebirth of Production in the Theory of Economic Organization," Kyklos, Wiley Blackwell, vol. 52(2), pages 201-218, May.
    10. Bucheli, Marcelo & Mahoney, Joseph T. & Vaaler, Paul M., 2007. "Chandler's Living History: The Visible Hand of Vertical Integration in 19th Century America Viewed under a 21st Century Transaction Costs Economics Lens," Working Papers 07-0111, University of Illinois at Urbana-Champaign, College of Business.
    11. Volker Mahnke, 2001. "The Process of Vertical Dis-Integration: An Evolutionary Perspective on Outsourcing," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 5(3), pages 353-379, September.
    12. Enrico Santarelli & Hien Thu Tran, 2016. "Diversification strategies and firm performance in Vietnam," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 24(1), pages 31-68, January.
    13. repec:bla:jomstd:v:47:y:2010:i:s1:p:859-883 is not listed on IDEAS
    14. Richard A. Bettis & Constance E. Helfat & J. Myles Shaver & Douglas J. Miller & Hsiao-Shan Yang, 2016. "The dynamics of diversification: Market entry and exit by public and private firms," Strategic Management Journal, Wiley Blackwell, vol. 37(11), pages 2323-2345, November.
    15. Tyson B. Mackey & Jay B. Barney & Jeffrey P. Dotson, 2017. "Corporate diversification and the value of individual firms: A Bayesian approach," Strategic Management Journal, Wiley Blackwell, vol. 38(2), pages 322-341, February.
    16. Miguel Espinosa, 2021. "Labor Boundaries and Skills: The Case of Lobbyists," Management Science, INFORMS, vol. 67(3), pages 1586-1607, March.
    17. Humphery-Jenner, M., 2011. "Diversification in Private Equity Funds : On Knowledge-sharing, Risk-aversion and Limited-attention," Discussion Paper 2011-046, Tilburg University, Center for Economic Research.
    18. Alla Lileeva & Johannes Van Biesebroeck, 2013. "Outsourcing When Investments Are Specific And Interrelated," Journal of the European Economic Association, European Economic Association, vol. 11(4), pages 871-896, August.
    19. Dow,Gregory K., 2019. "The Labor-Managed Firm," Cambridge Books, Cambridge University Press, number 9781107589650.
    20. John B. Parr, 2002. "Missing Elements in the Analysis of Agglomeration Economies," International Regional Science Review, , vol. 25(2), pages 151-168, April.
    21. Daniel A. Bens & Steven J. Monahan, 2004. "Disclosure Quality and the Excess Value of Diversification," Journal of Accounting Research, Wiley Blackwell, vol. 42(4), pages 691-730, September.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:59:y:2006:i:3:p:335-340. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.