DO CONGLOMERATES OPERATE MORE EFFICIENTLY THAN SINGLE-SEGMENT FIRMS?

Nilabhra Bhattacharya, Johan Sulaeman, Jeff Jiewei Yu

Research output: Contribution to journalArticlepeer-review

Abstract

We investigate the impact of organizational form on operational efficiency using a large sample covering manufacturing and non-manufacturing sectors in the United States over 30 years. We quantify operational efficiency using various measures, and find robust evidence that segments of diversified firms are operationally more efficient than their single-segment industry peers. The difference is more noticeable in industries where financing needs are high due to greater growth potential and where access to external markets is constrained due to higher information asymmetry.

Original languageEnglish (US)
Pages (from-to)1237-1270
Number of pages34
JournalSingapore Economic Review
Volume65
Issue number5
DOIs
StatePublished - Sep 1 2020

Keywords

  • Conglomerates
  • efficiency

ASJC Scopus subject areas

  • Economics and Econometrics

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