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A Risk-Return Model for Multiregion and Multiproduct Diversification of the Firm

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  • D M Hanink
  • R G Cromley

Abstract

The purpose of this paper is to demonstrate that the integration of locational considerations into product-diversification planning has the potential of supplying gains to the firm by providing hedges against both product-portfolio and location-portfolio risk. An efficient diversification frontier for region – product strategic planning is generated from hypothetical data for purposes of illustration. Results of the analysis are in agreement with Wahlroos's theory of the diversification of the firm.

Suggested Citation

  • D M Hanink & R G Cromley, 1987. "A Risk-Return Model for Multiregion and Multiproduct Diversification of the Firm," Environment and Planning A, , vol. 19(1), pages 81-92, January.
    • Handle: RePEc:sae:envira:v:19:y:1987:i:1:p:81-92
    DOI: 10.1068/a190081
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    References listed on IDEAS

    as
    1. Wahlroos, Bjorn, 1981. "On the Economics of Multiplant Operation: Some Concepts and an Example," Journal of Industrial Economics, Wiley Blackwell, vol. 29(3), pages 231-245, March.
    2. William F. Sharpe, 1963. "A Simplified Model for Portfolio Analysis," Management Science, INFORMS, vol. 9(2), pages 277-293, January.
    3. Duhaime, Irene M. & Thomas, Howard, 1983. "Financial analysis and strategic management," Journal of Economics and Business, Elsevier, vol. 35(3-4), pages 413-440, August.
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