The Cost Of Diversification: An Organizational Perspective

Namhoon Kwon
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Namhoon Kwon: Konkuk University

Korean Economic Review, 2004, vol. 20, 275-292

Abstract: This paper approaches the issue of corporate diversification from the perspective of the theory of firm. The cost of diversification is identified by the loss of innovative information due to increased communication requirement within the firm. The level of diversification is shown to decrease with a better information processing technology and stabler business environment. These results are in accordance with historical and industrial patterns of diversification.

Keywords: diversification; firm organization; lattice-theoretic method (search for similar items in EconPapers)
JEL-codes: L22 M20 (search for similar items in EconPapers)
Date: 2004
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