REASONS FOR CONGLOMERATION: EMPIRICAL ANALYSIS OF MANAGEMENT RESPONSES IN CHILE

Jorge Tarziján M () and José Rivera ()
Additional contact information
Jorge Tarziján M: Escuela de Administración, Pontificia Universidad Católica de Chile
José Rivera: Escuela de Administración, Pontificia Universidad Católica de Chile

Abante, 2000, vol. 3, issue 2, 203-226

Abstract: This paper is intended to contribute to the understanding of the motivations behind the diversification decisions of the Chilean “economic groups”. With this objective we surveyed the largest such groups in Chile. Our results show that the most important reasons for diversification for the top management of the Chilean business groups are managerial synergies (board of directors), financial synergies, information synergies and some specific operational synergies such as economies of scope in research and development. Also, most of the respondents stated that the diversification decisions of their firms or business groups have increased the multimarket contact with other companies or groups, influencing the strategies and diversification of competitors. The relationship between the degree of diversification of a group and its stated reasons for diversification are also analyzed. Significant differences in the motivations for diversification exist, depending on the group's actual level of diversification. Specifically, variables such as multimarket contact and access to the capital market are more important in more diversified groups. We also analyze the relationship between the size of a group and its stated reasons for diversification. There appear to be no significant differences between the answers of the management of bigger and smaller conglomerates. However, there is a positive correlation between the size of the groups and their level of diversification.

Keywords: Conglomerates; Corporate Structures; Emerging Markets; Diversification Decisions; Chile (search for similar items in EconPapers)
JEL-codes: G32 G34 L11 L22 (search for similar items in EconPapers)
Date: 2000
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.abante.cl/files/ABT/Contenidos/Vol-3-N2/3%20Tarzijan%20Rivera.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:pch:abante:v:3:y:2000:i:2:p:203-226

Ordering information: This journal article can be ordered from

Access Statistics for this article

Abante is currently edited by Eduardo Walker

More articles in Abante from Escuela de Administracion. Pontificia Universidad Católica de Chile. Contact information at EDIRC.
Bibliographic data for series maintained by Eduardo Walker ().