Unrelated Diversification and Firm Performance: 1980-2007 Evidence from Italy

Abstract

The goal of this article is to examine the relationship between unrelated diversification and performance. Results indicate that diversified firms, investing in activities far from the corebusiness, have high performance. Unrelated diversification positively affects firms’ performance. In addition, the estimation methods applied are fundamental in order to verify if there are endogeneity problems in the diversification decision and evaluate the effective role of diversification on performance.

Keywords

• Corporate diversification
• unrelatedness
• performance