Weathering A Recession: Effects of Size and Diversification on Newspaper Companies

This article explores the impact of the recession of 1990-1991 on U.S. newspaper firms and seeks to determine whether the sizes of the firms or the degree of diversification affected their financial performance during the economic downturn. Using data from 15 publicly traded companies before, during, and after the recession, correlation and regression analyses were conducted to study the effects of the size and diversification variables. The authors conclude that larger firms were more affected by the recession than smaller firms and that nonnewspaper diversification reduced the effects of the recession. Larger firms were more rapidly affected by the recession, placed greater controls on expenses during the recession, and emerged from the recession more slowly than smaller newspaper firms.