DOES TECHNOLOGICAL CONVERGENCE IMPLY CONVERGENCE IN MARKETS - EVIDENCE FROM THE ELECTRONICS INDUSTRY

This paper uses data on new subsidiaries, acquisitions, collaborative agreements, and patents of the largest 32 US and European electronics firms during 1984-1992 to examine the relationships between technologi cal and business diversification. We find that during the 1980s many f irms focused on fewer businesses, but we find no evidence of greater t echnological focus. We argue that this is related to the fact that, in spite of technological convergence, electronics sectors still command highly industry- or even product-specific downstream assets. In addit ion, we find that business focus improved performance, but that better performance is also associated with greater technological diversifica tion. We discuss some interpretation of this finding. (C) 1998 Elsevie r Science B.V. All rights reserved.