IDEAS home Printed from https://ideas.repec.org/a/kap/revind/v27y2005i2p125-145.html
   My bibliography  Save this article

Are EU Leading Firms Returning to Core Business? Evidence on Refocusing and Relatedness in a Period of Market Integration

Author

Listed:
  • Laura Rondi
  • Davide Vannoni

Abstract

This paper tests, for 108 diversified EU manufacturing leaders faced by the EU integration shock (1987–1997), if firms responded to increased competitive pressure by readjusting their industry-mix around a core of related activities. Our results show that, in spite of limited reduction in diversification, firms pursued strategies of related constrained diversification by expanding the output of industries related to the core. We also find that complementarity amongst the firm’s operations – i.e., sharing common intermediary products or common output markets – drives the refocusing. The effect is stronger for highly diversified firms. Our findings suggest that EU leaders are moving toward a more efficient use of their resources. Copyright Springer 2005

Suggested Citation

  • Laura Rondi & Davide Vannoni, 2005. "Are EU Leading Firms Returning to Core Business? Evidence on Refocusing and Relatedness in a Period of Market Integration," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 27(2), pages 125-145, September.
    • Handle: RePEc:kap:revind:v:27:y:2005:i:2:p:125-145
    DOI: 10.1007/s11151-005-8322-y
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11151-005-8322-y
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11151-005-8322-y?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

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

    References listed on IDEAS

    as
    1. Peters, Alice & Beckstead, Desmond & Gellatly, Guy & Baldwin, John R. & Yates, Janice, 2000. "Patterns of Corporate Diversification in Canada: An Empirical Analysis," Analytical Studies Branch Research Paper Series 2000150e, Statistics Canada, Analytical Studies Branch.
    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. Swati Dhingra & John Morrow & Johannes Boehm, 2015. "Input Capabilities and Product Adoption," 2015 Meeting Papers 963, Society for Economic Dynamics.
    2. 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.
    3. Mukherjee, Debmalya & Gaur, Ajai S. & Datta, Avimanyu, 2013. "Creating value through offshore outsourcing: An integrative framework," Journal of International Management, Elsevier, vol. 19(4), pages 377-389.
    4. Johannes Boehm & Swati Dhingra & John Morrow, 2022. "The Comparative Advantage of Firms," Journal of Political Economy, University of Chicago Press, vol. 130(12), pages 3025-3100.
    5. repec:spo:wpecon:info:hdl:2441/1dn2prktaq9p3949il1h9ds86b is not listed on IDEAS
    6. Boehm, Johannes & Dhingra, Swati & Morrow, John, 2016. "Swimming upstream: input-output linkages and thedirection of product adoption," LSE Research Online Documents on Economics 66418, London School of Economics and Political Science, LSE Library.
    7. René Belderbos & Leo Sleuwaegen & Reinhilde Veugelers, 2010. "Market Integration and Technological Leadership in Europe," European Economy - Economic Papers 2008 - 2015 403, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    8. repec:hal:spmain:info:hdl:2441/1dn2prktaq9p3949il1h9ds86b is not listed on IDEAS
    9. Angélica María Sánchez-Riofrío & Luis Ángel Guerras-Martín & Francisco Javier Forcadell, 2015. "Business portfolio restructuring: a comprehensive bibliometric review," Scientometrics, Springer;Akadémiai Kiadó, vol. 102(3), pages 1921-1950, March.
    10. Thomas Hutzschenreuter & Florian Gröne, 2009. "Changing Vertical Integration Strategies under Pressure from Foreign Competition: The Case of US and German Multinationals," Journal of Management Studies, Wiley Blackwell, vol. 46(2), pages 269-307, March.
    11. Ting Chang & Luca Iseppi, 2012. "EU Agro-Food Chain and Vertical Integration Potentiality: a Strategy for Diversification?," Transition Studies Review, Springer;Central Eastern European University Network (CEEUN), vol. 19(1), pages 107-130, September.
    12. Johannes Boehm & Swati Dhingra & John Morrow, 2019. "The Comparative Advantage of Firms," Sciences Po publications 2019-07, Sciences Po.
    13. Bee Yan Aw & Yi Lee, 2009. "Product Choice and Market Competition: The Case of Multiproduct Electronic Plants in Taiwan," Scandinavian Journal of Economics, Wiley Blackwell, vol. 111(4), pages 711-740, December.
    14. Hildebrandt, Peter & Oehmichen, Jana & Pidun, Ulrich & Wolff, Michael, 2018. "Multiple recipes for success – A configurational examination of business portfolio restructurings," European Management Journal, Elsevier, vol. 36(3), pages 381-391.
    15. repec:hal:wpspec:info:hdl:2441/1dn2prktaq9p3949il1h9ds86b is not listed on IDEAS

    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. Baldwin, John R. Beckstead, Desmond Brown, W. Mark, 2003. "Hollowing-out, Trimming-down or Scaling-up? An Analysis of Head Offices in Canada, 1999 to 2002," Economic Analysis (EA) Research Paper Series 2003019e, Statistics Canada, Analytical Studies Branch.
    2. Beckstead, Desmond Burrows, Sëan Gellatly, Guy, 2007. "New Economy: Using National Accounting Architecture to Estimate the Size of the High-technology Economy," The Canadian Economy in Transition 2007015e, Statistics Canada, Economic Analysis Division.
    3. Beckstead, Desmond & Caves, Richard & Baldwin, John R., 2002. "Changes in the Diversification of Canadian Manufacturing Firms and Plants (1973-1997): A Move to Specialization," Analytical Studies Branch Research Paper Series 2002179e, Statistics Canada, Analytical Studies Branch.
    4. Cucculelli, Marco & Le Breton-Miller, Isabelle & Miller, Danny, 2016. "Product innovation, firm renewal and family governance," Journal of Family Business Strategy, Elsevier, vol. 7(2), pages 90-104.
    5. Grossmann, Volker, 2007. "Firm size and diversification: Multiproduct firms in asymmetric oligopoly," International Journal of Industrial Organization, Elsevier, vol. 25(1), pages 51-67, February.
    6. Martin, John D. & Sayrak, Akin, 2003. "Corporate diversification and shareholder value: a survey of recent literature," Journal of Corporate Finance, Elsevier, vol. 9(1), pages 37-57, January.
    7. Gellatly, Guy Riding, Allan Thornhill, Stewart, 2003. "Growth History, Knowledge Intensity and Capital Structure in Small Firms," Economic Analysis (EA) Research Paper Series 2003006e, Statistics Canada, Analytical Studies Branch.
    8. Stewart Thornhill & Guy Gellatly & Allan Riding, 2003. "Growth history, knowledge intensity and capital structure in small firms," Venture Capital, Taylor & Francis Journals, vol. 6(1), pages 73-89, October.
    9. Baldwin, John R. Gellatly, Guy, 2007. "Global Links: Multinationals in Canada: An Overview of Research at Statistics Canada," The Canadian Economy in Transition 2007014e, Statistics Canada, Economic Analysis Division.
    10. Peters, Alice & Baldwin, John R., 2001. "Innovation and Connectivity: The Nature of Market Linkages and Innovation Networks in Canadian Manufacturing Industries," Analytical Studies Branch Research Paper Series 2001165e, Statistics Canada, Analytical Studies Branch.

    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:kap:revind:v:27:y:2005:i:2:p:125-145. 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    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.