The Performance of related and unrelated diversified firms: Theory and evidence

thompson, temitope (2006) The Performance of related and unrelated diversified firms: Theory and evidence. [Dissertation (University of Nottingham only)] (Unpublished)

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Abstract

Abstract

Studies on the performance of related and unrelated diversified firms have shown the former to be more profitable. The Resource Based View put forward by Edith Penrose (1959 and 1995) stipulates that the presence of hard-to-duplicate resources within a firm allows for sustainability of competitive advantage. According to the author, the decision of management to expand through acquisition can only be profitable if firms take into perspective their existing resources and that of the target firm(s); implying that better performance is guaranteed if firms undertake related diversification. Furthermore, certain factors such as the economies of scope and scale, reduction of transactions costs, increase in market power, have been identified by researchers as contributing forces to the performance of related diversified firms. By investigating the pre and post merger performances of acquisitions that occurred in the UK from 1995-2003, this study hopes to test the assertion by Edith Penrose, amongst others by considering some of these factors, with the aim of giving insight into the better performance of related diversified firms.

Item Type: Dissertation (University of Nottingham only)
Keywords: performance, related, unrelated, diversification
Depositing User: EP, Services
Date Deposited: 30 Nov 2006
Last Modified: 06 Apr 2016 15:42
URI: http://eprints.nottingham.ac.uk/id/eprint/20614

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