Andreou, Louca, Petrou (2016)

Question 1

Absorptive capacity viewpoint

Answer 1

past experiences enables firms to recognize and explicitly codify new knowledge into systems, routines, and procedures to guide future actions

Question 2

Supprted hypotheses

Answer 2

H1a: (SUP) Single-Business-Once firms demonstrate the lowest corporate diversification performance
H1c: (SUP) Multi-Business-Once firms demonstrate higher corporate diversification performance in comparison to Single-Business-Once firms and lower corporate diversification performance in comparison to Single/Multi-Business-Many.
H1b: (SUP) Single/Multi-Business-Many firms demonstrate the highest corporate diversification performance
H2: (SUP) Firms demonstrate higher performance when they diversify through internal growth than acquisitions.

Question 3

Key message

Answer 3

• A value discount is only found in single business firms that diversify once
• Firms with more diversifications achieve value premiums
• Firms using internal growth to diversify demonstrate higher valuations rather firm that pursue acquisitions