Related and unrelated diversification in crisis and in prosperity

Karoly Miklos Kiss (), Laszlo Lorincz, Zsolt Csáfordi and Balázs Lengyel
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Karoly Miklos Kiss: Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and University of Pannonia, Veszprem

No 1823, CERS-IE WORKING PAPERS from Institute of Economics, Centre for Economic and Regional Studies

Abstract: How does technological relatedness influence the portfolio of multi-product firms hit by external shocks? To answer this question, we look at the effect of product-specific demand shocks on product portfolios of Hungarian firms in the 2005-2012 period. We find that production have become more cohesive in terms of technological relatedness if firms were exposed to demand shocks. Evidence suggests that firms in crisis drop or downsize additional products not related to their core product and concentrate resources on related products.

Keywords: product diversification; technological relatedness; industry space network; dynamics of product portfolio; crisis (search for similar items in EconPapers)
JEL-codes: C23 D22 D24 L25 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2018-09
New Economics Papers: this item is included in nep-bec, nep-com and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:has:discpr:1823

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