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Diversification strategy and systematic risk
Author(s) -
Montgomery Cynthia A.,
Singh Harbir
Publication year - 1984
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.4250050208
Subject(s) - diversification (marketing strategy) , systematic risk , economics , financial economics , business , industrial organization , marketing
This paper addresses the relationship between diversification strategy and systematic risk (beta). Beta values are examined for six diversification categories, and it is found that betas for unrelated diversifiers are significantly higher than those of other firms. Possible contributions to this difference, including market power, capital structure, and capital intensity are explored.