Why do Firms Diversify? The Italian Evidence

This study looks into a topic that has been discussed in Strategic Management for a long time: product diversification. The paper’s main research topic is whether product diversification decisions are driven by opportunism or the hunt for financial synergy. Our findings imply that internal capital market considerations play a major role in the choice to diversify in unrelated segments and for unlisted enterprises, based on a unique panel of Italian firms for a lengthy period of time. An internal capital market is thought to be useful for enterprises in a country like Italy, where there are many frictions in the capital market and insufficient credit protection and regulation.

Author (s) Details

Maurizio La Rocca
Department of Business Science, University of Calabria, Cubo 3-C, Campus of Arcavacata, 87036 – Rende (CS), Italy.

Tiziana La Rocca
Department of Economics, University of Messina, Italy.

Alfio Cariola
Department of Business Science, University of Calabria, Cubo 3-C, Campus of Arcavacata, 87036 – Rende (CS), Italy.

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