Teece (1980) extended this idea by his empirical observations of scope for diversification to multi-output from single input especially in petroleum industry in USA.
The negative values of estimated time varying conditional correlations are mainly observed during periods of market turbulence and crisis indicating the scope of portfolio diversification and hedging during these periods.
Such rare-type advantage is a hallmark of frequency-dependent selection and opens the scope for processes of diversification that require ecological contact rather than geographical isolation.
The RC test is sensitive to temporal depth, phylogenetic scope, and nonindependence of diversification rate shifts [ 70].
relative bargaining power, for anticipating competitors' actions, for analyzing cost and value structures and their relevance to competition, and for assessing potential changes in the scope of the firm (diversification and vertical integration).
Alex Griaznov of S&P said the major energy groups would be able to maintain their investment-grade status: "They have scale, scope, a diversification of operations and an ability to address market conditions with reductions in capital expenditures and operating costs".
Economic theory suggests that when the costs of producing outcomes separately exceed the costs of joint production, firms can achieve economies of scale or scope through the business strategies of diversification, merger, acquisition, or joint venture [ 7- 10].
The shifts identified by RC should be treated with caution as the RC test is sensitive to temporal depth, phylogenetic scope, and the non-independence of diversification rate shifts [ 31].
Furthermore, evaluating diversification lies beyond the scope of this paper.
He rejects the principle of diversification.
That's a lack of diversification".
