Diversification Strategy and R&D Intensity in Multiproduct Firms

Abstract

This study provides empirical evidence that choice of diversification strategy systematically affects R&D intensity in large multiproduct firms. Research and development intensity in dominant-business firms was found to be significantly higher than in related- and unrelated-business firms and was also higher in related-business firms than in unrelated-business firms. These findings suggest the need to examine the implications of different types of corporate diversification strategy on the management of corporate-strategic-business-unit relations in large multiproduct corporations.