Corporate diversification, coherence and economic performance

Within the diversification literature, the concept of corporate coherence has been referred to the ability of the firm to generate and explore synergies of various type. However, the empirical studies have insofar provided only approaches taking explicitly into account only the product/market side of the phenomenon. The present paper operationalizes the concept of corporate coherence as a dynamic interconnectedness between the company's technological competencies and its downstream activities. Secondly, it provides some further empirical evidence on the widely discussed relationship between corporate diversification and performance. Specifically, it offers some (albeit rather weak) evidence that economic performance is positively influenced not by the degree of diversification per se, but by the ability of the company to increase its corporate coherence.