On the Evolution of Product Portfolio Coherence of Cooperatives versus Corporations: An Agent-Based Analysis of the Single Origin Constraint

George Hendrikse and Ruud Smit

ERIM Report Series Research in Management from Erasmus Research Institute of Management (ERIM), ERIM is the joint research institute of the Rotterdam School of Management, Erasmus University and the Erasmus School of Economics (ESE) at Erasmus University Rotterdam

Abstract: Agent-based methodology is adopted to analyze the relationship between governance structure and the evolution of product portfolio. A corporation and a cooperative are distinguished by the single origin constraint. The single origin constraint entails that the product requiring the inputs of the members of a cooperative will never be divested. It is es-tablished that a concentric diversification strategy results in randomly distributed clusters of related products of the product portfolio of corporations, while the single origin constraint of a cooperative is responsible for pulling all prod-ucts together in one cluster. More general, the centripetal effect of one product with infinite lifetime on portfolio com-position dominates the centrifugal effect of products with finite lifetime, regardless the number of products with finite lifetime.

Keywords: Concentric diversification; agent-based analysis; cooperatives; product lifetime (search for similar items in EconPapers)
JEL-codes: L25 M M13 O32 (search for similar items in EconPapers)
Date: 2007-08-30
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Citations: View citations in EconPapers (3)

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