TY  - JOUR
AU  - Lichtenberg,Frank R.
TI  - Industrial De-Diversification and its Consequences for Productivity
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 3231
PY  - 1990
Y2  - January 1990
UR  - http://www.nber.org/papers/w3231
L1  - http://www.nber.org/papers/w3231.pdf
N1  - Author contact info:
Frank R. Lichtenberg
Columbia University
504 Uris Hall
3022 Broadway
New York, NY  10027
Tel: 212/854-4408
Fax: (212) 854-9895
E-Mail: frl1@columbia.edu
M2  - featured in NBER digest on 1990-08-01
AB  - Due in large part to intense takeover activity during the 1980s, the extent of American firms' industrial diversification declined significantly during the second half of the decade. The mean number of industries in which firms operated declined 14 percent, and the fraction of single-industry firms increased 54 percent. Firms that were "born" during the period were much less diversified than those that "died", and "continuing" firms reduced the number of industries in which they operated. using plant-level Census Bureau data, we show that productivity is inversely related to the degree of diversification: holding constant the number of the parent firm's plants, the greater the number of industries in which the parent operates, the lower the productivity of its plants. Hence de-diversification is one of the means by which recent takeovers have contributed to U.S. productivity growth. We also find that the effectiveness of regulations governing disclosure by companies of financial information for their industry segments was low when they were introduced in the 1970s and has been declining ever since.
ER  -