Corporate diversification, coherence and economic performance

Within the diversification literature the concept of corporatecoherence has been referred to as the ability of the firm togenerate and explore synergies of various types. However, theempirical studies have insofar provided only approaches takingexplicitly into account the product/market side of the phenomenon.The present paper operationalizes the concept of corporate coherenceas a dynamic interconnectedness between the company’stechnological competencies and its downstream activities. Italso provides some further empirical evidence on the widelydiscussed relationship between corporate diversification andperformance. Specifically, it offers some (albeit rather weak)evidence that economic performance is positively influencednot by the degree of diversification per se, but by the abilityof the company to increase its corporate coherence.