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Related and unrelated diversification in crisis and in prosperity

Author

Listed:
  • Karoly Miklos Kiss

    (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and University of Pannonia, Veszprem)

  • Laszlo Lorincz

    (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and Corvinus University of Budapest)

  • Zsolt Csafordi

    (Erasmus University Rotterdam)

  • Balazs Lengyel

    (Agglomeration and Social Networks Lendület Research Group Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and International Business School Budapest)

Abstract

How does technological relatedness influence the portfolio of multi-product firms hit by external shocks? To answer this question, we look at the effect of product-specific demand shocks on product portfolios of Hungarian firms in the 2005-2012 period. We find that production have become more cohesive in terms of technological relatedness if firms were exposed to demand shocks. Evidence suggests that firms in crisis drop or downsize additional products not related to their core product and concentrate resources on related products.

Suggested Citation

  • Karoly Miklos Kiss & Laszlo Lorincz & Zsolt Csafordi & Balazs Lengyel, 2018. "Related and unrelated diversification in crisis and in prosperity," CERS-IE WORKING PAPERS 1823, Institute of Economics, Centre for Economic and Regional Studies.
    • Handle: RePEc:has:discpr:1823
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    References listed on IDEAS

    as
    1. Yakov Amihud & Baruch Lev, 1981. "Risk Reduction as a Managerial Motive for Conglomerate Mergers," Bell Journal of Economics, The RAND Corporation, vol. 12(2), pages 605-617, Autumn.
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    Cited by:

    1. Eltigani Ahmed & James Kilika & Clare Gakenia, 2021. "The conceptualization of dynamic resource orchestration framework as an anchor for organizational resilience," International Journal of Research in Business and Social Science (2147-4478), Center for the Strategic Studies in Business and Finance, vol. 10(7), pages 53-61, October.

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    More about this item

    Keywords

    product diversification; technological relatedness; industry space network; dynamics of product portfolio; crisis;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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