Strategic Management Journal Vol. 3 No. 4 1982

Diversification strategy and profitability

Richard P. Rumelt^1,2

¹ University of Southern California · ² University of California, Los Angeles

Abstract

Prior work has shown an association between diversification strategy and profitability. This paper replicates that association using more recent and complete data and goes on to investigate the sources of the association. Theoretical arguments are advanced which predict the association which will remain once the effects of varying industry profitability are removed. Empirical tests verify this prediction and permit the discrimination between the effects of industry and diversification strategy on profitability.

DOI

10.1002/smj.4250030407

Volume

3

Issue

4

Pages

359-369

Language

en

Sources

crossref openalex

Cite

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