The Theory of Corporate Diversification

  • Nadege Genetay
  • Philip Molyneux


This chapter reviews the theory of corporate diversification to provide an insight into why banks should seek to diversify into insurance and other areas. The literature on corporate diversification has been the focus of interest of researchers in both the management and finance fields. Interest was raised, in particular, by the creation of an organised corporate mergers and acquisitions (M&A) market in the United States during the 1960s when many financial and non-financial firms embarked on diversification strategies. An important question, in both the management and finance fields, has been to understand why corporations engage in such strategies and whether these diversification moves have been successful.


Target Firm Diversification Strategy Life Insurer Expense Ratio Merger Process 
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Copyright information

© Nadege Genetay and Philip Molyneux 1998

Authors and Affiliations

  • Nadege Genetay
    • 1
  • Philip Molyneux
    • 2
  1. 1.Manchester School of ManagementUMISTManchesterEngland
  2. 2.Institute of European FinanceUniversity of WalesBangorUK

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