ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Characteristics of Diversification in-Indian Industry

In 1975-76, the extent and magnitude of diversification in the Indian private corporate sector was low or at most moderate. Nevertheless, the small proportion of diversified companies contributed a major share in the sales of alt companies. As for the trend in the extent and magnitude of diversification, this increased only marginally or at most moderately during 1975-76 to 1980-81. Companies tend to diversify into activities related to their main activity. The industry of classification of a company undertaking diversification has long-term growth and profitability rates not greater than the all-industry level. High growth and profitability rates are observed in the industries into which diversification has taken place. The age of a company is found to be positively associated with diversification. Likewise, 'monopoly houses' have a positive association with diversification.

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