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A longitudinal study of the cause and consequences of changes in diversification in the U.S. pharmaceutical industry 1977–1986
Author(s) -
Hill Charles W. L.,
Hansen Gary S.
Publication year - 1991
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.4250120303
Subject(s) - diversification (marketing strategy) , pharmaceutical industry , industrial organization , economics , longitudinal study , business , economic geography , marketing , microbiology and biotechnology , biology , mathematics , statistics
The paper hypothesizes that diversification by firms based in the pharmaceutical industry during the 1977‐86 time period was primarily undertaken to reduce the risks associated with being dependent upon a technologically dynamic environment. Consistent with this non‐efficiency motive for diversification, declining economic performance is predicted. A longitudinal empirical analysis provides support for these propositions.