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Stock market reactions to related diversification moves by service firms seeking benefits from information asymmetry and economies of scope
Author(s) -
Nayyar Praveen R.
Publication year - 1993
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.4250140802
Subject(s) - scope (computer science) , diversification (marketing strategy) , information asymmetry , economies of scope , business , industrial organization , service (business) , stock (firearms) , marketing , economics , finance , economies of scale , mechanical engineering , computer science , engineering , programming language
Service firms may seek benefits from information asymmetry and economies of scope by diversifying. Each source of benefit is based on different underlying mechanisms and each is affected differently by implementation difficulties and service characteristics. Previous research, however, has not analyzed the relative performance effects of these two very different sources of benefits for related diversified service firms. Thus, this paper uses an integrative framework including these aspects to examine the relative performance effects of benefits from information asymmetry and economies of scope in service firms.