The effect of product diversification strategies on the performance of health insurance conglomerates

Cassandra R. Cole and J. Bradley Karl

Applied Economics, 2016, vol. 48, issue 3, 190-202

Abstract: The conglomerate organizational structure of health insurers suggests two distinct methods of product diversification - the first is firm-level diversification, or diversification within individual affiliates, and the second is conglomerate-level diversification, or diversification across affiliates of the conglomerate. We hypothesize that using both firm- and conglomerate-level diversification may magnify the costs or benefits of diversification on the financial performance of the conglomerate. Our results confirm this hypothesis and suggest a positive relation between health insurer financial performance and the use of both product line diversification methods. Our results not only contribute to the body of literature related to corporate diversification but are also important to policymakers and all health insurance market participants as portions of the Affordable Care Act continue to be implemented.

Date: 2016
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://hdl.handle.net/10.1080/00036846.2015.1076149 (text/html)
Access to full text is restricted to subscribers.

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:taf:applec:v:48:y:2016:i:3:p:190-202

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEC20

DOI: 10.1080/00036846.2015.1076149

Access Statistics for this article

Applied Economics is currently edited by Anita Phillips

More articles in Applied Economics from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().