The optimal degree of diversification in ‘high‐tech’ firms

Steven E. Plaut, Yael Ilan

Research output: Contribution to journalArticlepeer-review


The literature on innovation and investment contains two contradictory strands. One emphasizes investment diversification as a form of risk reduction. The other emphasizes specialization as a way to exploit economies of scale and learning effects. The literature is surveyed and a simple model of optimal specialization is developed to clarify the issue. Comparative static results are presented.

Original languageEnglish
Pages (from-to)201-206
Number of pages6
JournalR and D Management
Issue number3
StatePublished - Jul 1987
Externally publishedYes

ASJC Scopus subject areas

  • Business and International Management
  • General Business, Management and Accounting
  • Strategy and Management
  • Management of Technology and Innovation


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