Abstract
This paper studies the diversification and refocusing strategies of firms in the last three decades. The 1980s were characterized by a trend towards greater focus. This trend slackens in the 1990s to be replaced by a surge in the number of newly listed single-segment firms. From 2000 to 2007 there is very little change in the proportion of diversified firms. Overall, the proportion of conglomerates declines from 40% to 17% from 1980 to 1997. In addition, about one third of the diversifying firms reverse the diversification decision within four years. The analysis of the statements made by these firms suggests that there is significant heterogeneity in the motivations behind diversification.
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Basu, N. Trends in corporate diversification. Financ Mark Portf Manag 24, 87–102 (2010). https://doi.org/10.1007/s11408-009-0123-0
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DOI: https://doi.org/10.1007/s11408-009-0123-0