Effects of corporate diversification on productivity

Deskripsi

Using plant-level observations from the longitudinal research database i show that conglomerates are more productive than stand-alone firms at a given point in time. Dynamically, however, firms that diversify experience a net reduction in productivity. While the acquired plants increase productivity, incumbent plants suffer. Moreover, stock prices track firm productivity and this tracking is equally strong for diversified and stand-alone firms..Printed Journal