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Strategic Management Journal 1981

Corporate economic performance: Diversification strategy versus market structure

H. Kurt Christensen1; Cynthia A. Montgomery2

1 Purdue University West Lafayette · 2 University of Michigan–Ann Arbor

Abstract

This paper incorporates both diversification strategy and market structure variables in a study of corporate economic performance. A subsample of 128 firms from Rumelt's 1974 study was updated and utilized to investigate the possibility that market structure variables might moderate or confound the diversification/performance relationship he reported. Study results indicate that performance differences could be demonstrated for some of Rumelt's categories, but, across the range of categories, a hypothesis of performance differences was rejected. As expected, categories associated with distinctly high or distinctly low economic performance were also associated with significant differences in a series of market structure variables.

DOI
10.1002/smj.4250020402
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