Measurement of Firm Diversification: Is It Robust?

Chatterjee, Sayan; Blocher, James D.

doi:10.2307/256320

Cited by 74 publications

(22 citation statements)

References 15 publications

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“…First, drawing on Martin and Sayrak (2003), we call attention on the kinds of measures of corporate diversity and firm performance (Montgomery 1982;Palepu 1985a;Ramanujam 1987;Chatterjee and Blocher 1992;Robins and Wiersema 2003), as well as on assessing biases in econometric estimations (Whited 2001;Mansi and Reeb 2002;Villalonga 2004a).…”

Section: Outcomes Of Unrelated Diversificationmentioning

confidence: 99%

Revamping research on unrelated diversification strategy: perspectives, opportunities and challenges for future inquiry

Picone

Dagnino

2015

J Manag Gov

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With the aim of achieving an advanced understanding of current research on unrelated diversification and providing fruitful groundwork to foster active interchange between disciplinary traditions, this paper detects articles from two relevant research streams; i.e., strategic management and financial economics. We first provide a brief overview of management thinking on unrelated diversification strategy. Then, we present a conceptual map that offers a comprehensive appreciation of unrelated diversification strategy antecedents (i.e., environmental and institutional, organizational value-enhancing, and managerial drivers), implementation process (i.e., managerial complexity, misallocation of resources, and structural inertia), and consequences (i.e., diversification premiums and discounts). Finally, we unpack the major gaps in our current knowledge that may help refocus the research agenda on unrelated diversification strategy and revamp the apparent waning proclivity of this issue.

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Section: Outcomes Of Unrelated Diversificationmentioning

confidence: 99%

Revamping research on unrelated diversification strategy: perspectives, opportunities and challenges for future inquiry

Picone

Dagnino

2015

J Manag Gov

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“…Because each of first-level patent classes can be further classified into several second-level patent classes, the second-level classification schemes are subsets of the first-level classification schemes. Based on the previous study of Chatterjee and Blocher (1992), TD is calculated as follows:…”

Section: Measurementmentioning

confidence: 99%

“…Chatterjee and Blocher (1992) demonstrate that the entropy measure is the most useful for exploring within-group variance based on the consistency of the entropy measure in both the discriminating power and the predictive validity tests, because the entropy measure can be separated into related and unrelated categories. This study refers to Chatterjee and Blocher (1992) to use the entropy measure to split TD into RTD and UTD, since the entropy measure can be perfectly divided into related and unrelated categories. Therefore, this study argues that TD (TD) consists of two types: UTD and RTD.…”

Section: Measurementmentioning

confidence: 99%

“…Therefore, this study argues that TD (TD) consists of two types: UTD and RTD. This paper refers to the idea of Chatterjee and Blocher (1992) to measure UTD and RTD as follows:…”

Section: Measurementmentioning

confidence: 99%

“…This study refers to the prior research of Chatterjee and Blocher (1992) to define UTD as the extent to which a firm diversifies its technological capabilities on irrelevant technological fields (first-level patent classes). Based on the idea of Chatterjee and Blocher (1992), UTD is calculated as follows:…”

Section: Unrelated Technological Diversification (Utd)mentioning

confidence: 99%

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Using the entropy-based patent measure to explore the influences of related and unrelated technological diversification upon technological competences and firm performance

Chen

Chang

2011

Scientometrics

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This study applies the entropy-based patent measure to explore the influences of related technological diversification (RTD) and unrelated technological diversification (UTD) upon technological competences and firm performance. The results show that RTD has a monotonically positive effect on technological competences and UTD has an inverse U-shaped effect on technological competences. Besides, the results demonstrate that the extent of the positive influence of RTD upon technological competences is better than that of UTD upon technological competences. If American pharmaceutical companies would like to adopt technological diversification, this study suggests that they should undertake RTD, rather than UTD. In addition, this study finds out that technological competences mediate the relationship between firm performance and both of RTD and UTD. Although RTD and UTD cannot significantly influence firm performance directly, they can positively affect firm performance indirectly through technological competences.

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