A large body of business strategy literature explores the relationship between diversification and firm performance. Conceptually, increased diversification should enhance performance through economies of scope and scale, market power, and risk reduction. However, diversifiers also face significant negative impacts from increased complexity. Consequently, extensive empirical analyses yield mixed results regarding diversification's effects on performance. In this context, Frithjof Pils addresses two key research questions: the overall relationship between diversification strategies and firm performance, and the newly developed indicators of business relatedness that can enhance understanding of diversification's performance implications. Pils tackles a highly relevant topic, as decisions about business involvement are central to corporate strategy. His research objectives are well-articulated, grounded in a thorough review of existing literature. The empirical methods employed reflect a robust research design to effectively answer the posed questions. The integration of narrative review, meta-analysis, and primary empirical research showcases the author's comprehensive methodological expertise.
