Abstract

http://ssrn.com/abstract=1728525
 
 

References (47)



 
 

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Shopping for Information? Diversification and the Network of Industries


Fernando Anjos


University of Texas at Austin

Cesare Fracassi


University of Texas at Austin

April 1, 2014

AFA 2012 Chicago Meetings Paper

Abstract:     
We propose a view of corporate diversification as a strategy that aims to exploit internal information markets, bringing together information scattered across the economy. We test this hypothesis constructing an inter-industry network using input-output data. First, we introduce a network proxy for a conglomerate's informational advantage relative to specialized firms, named excess centrality. Second, we show that high-excess-centrality conglomerates have greater value, even when variation in conglomerate network position is exogenously driven by changes to the overall network structure. Finally, and consistent with our informational-advantage hypothesis, we find that high-excess-centrality conglomerates produce more and better patents.

Number of Pages in PDF File: 75

Keywords: corporate diversification, networks, innovation, input-output tables

JEL Classification: D2, D57, L14, L25, G34, Z13

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Date posted: December 19, 2010 ; Last revised: April 1, 2014

Suggested Citation

Anjos, Fernando and Fracassi, Cesare, Shopping for Information? Diversification and the Network of Industries (April 1, 2014). AFA 2012 Chicago Meetings Paper. Available at SSRN: http://ssrn.com/abstract=1728525 or http://dx.doi.org/10.2139/ssrn.1728525

Contact Information

Fernando Anjos
University of Texas at Austin ( email )
Austin, TX 78712
United States
5122326825 (Phone)
HOME PAGE: http://sites.google.com/site/fernandoanjossite/home
Cesare Fracassi (Contact Author)
University of Texas at Austin ( email )
Red McCombs School of Business
1 University Station B660
Austin, TX 78712
United States
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