Diversification strategies in the changing environment: empirical evidence from Indian firms

The objective of the paper is to study the extent of diversification on a sample of 536 companies in India. The Jacquemin-Berry Entropy-Index measure has been used. The study covers a period of 10 years from 2001 to 2011. This period takes into account the influence of both liberalization reforms and global recession. The results show that related diversification (RD) has been the most favored diversification strategy in the Indian corporate sector. Further, the pattern of diversification during this period of 10 years suggests that both forward and backward movements are being followed by Indian companies; thus making the overall pattern somewhat erratic.