Scope, Scale and Concentration: The 21st Century Firm / Gerard Hoberg, Gordon M. Phillips.

Format:

Book

Author/Creator:

Hoberg, Gerard.

Contributor:

National Bureau of Economic Research.

Phillips, Gordon M.

Series:

Working Paper Series (National Bureau of Economic Research) no. w30672.

NBER working paper series no. w30672

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2022.

Summary:

We provide evidence that over the past 30 years, U.S. firms have expanded their scope of operations. Increases in scope and scale were achieved largely without increasing traditional operating segments. Scope expansion significantly increases valuation and is primarily realized through acquisitions and investment in R&D, but not through capital expenditures. We show that traditional concentration ratios do not capture this expansion of scope. Our findings point to a new type of firm that increases scope through related expansion, which is highly valued by the market.

Notes:

Print version record

November 2022.