Corporate Diversification and Firm Performance : The Role of Product-Market and Business-Model Relatedness
Type
conference paper
Date Issued
2013-09-29
Author(s)
Abstract
This study examines the relative importance of three relatedness dimensions - product, customer, and business-model relatedness - to explain corporate performance. Using a unique dataset of 170 multiunit chain organizations from 1999 to 2010, we first verify prior empirical findings by showing that related product diversification is positively associated with performance. Beyond previous findings, results Show that related customer and business-model diversification is also positively associated with performance. Interestingly, when simultaneously examined, related product diversification becomes insignificant, while related customer and business-model diversification remain significantly positively associated with performance. This finding suggests that the concepts of customer and business-model relatedness may be better able to capture resource relatedness among lines of business than the predominantly used concept of product relatedness.
Language
English
Keywords
Corporate diversification
business models
resource relatedness
firm performance
HSG Classification
contribution to scientific community
Refereed
Yes
Book title
Strategy and Sustainability
Publisher
Strategic Management Society
Publisher place
Chicago
Event Title
33rd Strategic Management Society (SMS) Annual International Conference
Event Location
Atlanta, GA
Event Date
28.09-01.10.2013
Subject(s)
Division(s)
Eprints ID
222501