Firm diversification has been studied in several different fields of academic research. Strategic management studies analyse the impact of different kinds of diversification policies (eg related vs. unrelated corporate diversification) on firm performance. The key concern of the finance literature is the search for synergies, in cases where such efficiency gains can not be realised on the operational side of the corporation. Instead, diverse capital market imperfections are necessary to justify economically diversifying moves. Finally, within the traditional" structure-conductperformance" paradigm industrial organisation research tried to find out whether diversification, as an explanatory variable, significantly influences firm performance or not.

If one considers all the arguments of these approaches, it will be recognised that it is almost impossible to establish a theory of diversification within the neo-classical framework. At best multiproduct firms can be considered equally efficient compared to several single product firms, given that market contracts are perfect substitutes for internal production arrangements1.