THE EFFECT OF WITHIN-INDUSTRY DIVERSIFICATION ON FIRM PERFORMANCE : SYNERGY CREATION, MULTI-MARKET CONTACT AND MARKET STRUCTURATION
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
Author(s)
Detail(s)
| Original language | English |
|---|---|
| Pages (from-to) | 1131-1153 |
| Journal / Publication | Strategic Management Journal |
| Volume | 25 |
| Issue number | 12 |
| Online published | 15 Oct 2004 |
| Publication status | Published - Dec 2004 |
| Externally published | Yes |
Link(s)
Abstract
This paper examines the effect of diversification upon intra-industry performance. We propose that intra-industry diversification promises three sets of benefits, which, separately and in combination, provide firms with a competitive advantage: synergies arising from economies of scope; premiums from mutual forbearance enabled by multi-market competition; and efficiencies derived from market structuration. The additive and integrative effects of the first two have not been explored. The benefits of market structuration remain untheorized and thus untested. The test of our theoretical model in the Canadian general insurance industry indicates that mutual forbearance provides advantage under specified conditions, that market structuration also provides advantages, but that diversification per se does not. Copyright © 2004 John Wiley & Sons, Ltd.
Research Area(s)
- Familiarity of rivals, Firm performance, Intra-industry diversification, Market structuration, Multi-market competition, Mutual forbearance
Citation Format(s)
THE EFFECT OF WITHIN-INDUSTRY DIVERSIFICATION ON FIRM PERFORMANCE: SYNERGY CREATION, MULTI-MARKET CONTACT AND MARKET STRUCTURATION. / LI, Stan Xiao; GREENWOOD, Royston.
In: Strategic Management Journal, Vol. 25, No. 12, 12.2004, p. 1131-1153.
In: Strategic Management Journal, Vol. 25, No. 12, 12.2004, p. 1131-1153.
Research output: Journal Publications and Reviews (RGC: 21, 22, 62) › 21_Publication in refereed journal › peer-review
