The influence of relatedness on corporate diversification

Corporate diversification is often associated with growth, success and development of the company. There is much research for the motives of diversification; however connection between corporate diversification and relatedness is quite new. This paper investigates influence of human capital based and resource based relatedness measures on three aspects of corporate diversification (diversification into secondary activities, diversification through the market, and choice of the industry entry mode). The success of external diversification through market is measure by stock price reactions. The research is based on the custom dataset created with use of Zephyr, Orbis, Eurostat datasets and dataset created by Neffke and Henning (2010).