The determinants of firm diversification in UK quoted companies |
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Authors: | Adrian Gourlay Jonathan Seaton |
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Institution: | Adrian Gourlay *,Jonathan Seaton |
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Abstract: | This paper examines the role of resource-based and governance factors in determining the boundaries of UK quoted companies, measured by both the probability and intensity of market diversification. Using a panel of over 2000 firms for the period 1988 to 2001 it is found that firm-level heterogeneity and industry characteristics account for the variability in diversification behaviour and that resource-based and governance factors interact in a complex manner not necessarily fully explained by the theoretical literature. The results also indicate that the degree of data aggregation has significant implications for the empirical modelling of market diversification. |
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