Download now Free registration required
Previous studies have shown that regulated firms tend to diversify for different reasons than unregulated ones. This is the case for product but also for geographical diversification, i.e. international expansion. The logic generally advanced is that regulated firms tend to diversify when they face costly and difficult relationships with the regulatory authority in charge of their sector. This approach, however, does not explain what is really at the core of the problem in regulated firms' relationships with regulators, why these firms cannot overcome part of the problem by developing nonmarket strategies - lobbying, campaign contributions, etc. - to influence regulatory decisions, and why they sometimes opt for international expansion rather than product diversification.
- Format: PDF
- Size: 330.1 KB