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Performance differences in related and unrelated diversified firms
Author(s) -
Bettis Richard A.
Publication year - 1981
Publication title -
strategic management journal
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 11.035
H-Index - 286
eISSN - 1097-0266
pISSN - 0143-2095
DOI - 10.1002/smj.4250020406
Subject(s) - sample (material) , business , econometrics , industrial organization , capital expenditure , capital (architecture) , regression analysis , economics , marketing , accounting , statistics , mathematics , geography , chemistry , chromatography , archaeology
Abstract This paper investigates performance differences (in terms of ROA) between related and unrelated diversified firms. Two regression models of performance are estimated using a sample of 80 firms. Performance differences are associated with advertising expenditures, accounting determined risk, research and development expenditures and capital intensity. The models suggest that research and development expenditures are an important determinant in the performance advantage enjoyed by related diversified firms.