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Product diversification and stability of employment and sales: first evidence from German manufacturing firms

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In this study, we use a unique rich newly built data set for German manufacturing enterprises to investigate the relationship between product diversification and the stability of sales and employment. We find that contrary to portfolio theoretic considerations, more diversified firms exhibit a higher variability of sales and employment. However, the effects are negligibly small from an economics point of view.
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Document Type: Research Article

Affiliations: Institute of Economics, Leuphana University of Lüneburg, 21335 Lüneburg, Germany

Publication date: 2011-11-01

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