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This study analyzed the effect of industrial and international diversification on the profitability and operational risk of Brazilian companies. The sample comprised 210 publicly traded Brazilian companies, who trade shares on the B3 stock exchange. The results of the study showed that industrially diversified companies both reduce operational risk and increase profitability in terms of return on assets, while companies that are internationally diversified reduce their profitability. As well, the companies that diversify both industrially and internationally, see increasedoperational risk. This study is relevant to the investigation of the relationship of industrial and international diversification in companies' operating results, as it indicates that, in the context of Brazil, industrial diversification tends to improve operating results, with an increase in profitability and a reduction in operating risk. [ABSTRACT FROM AUTHOR]

In 2015, Brazil has taken steps toward re-consolidating its domestic defense industry. In the 1980s, Brazil built a dynamic and diversified defense industry. The state-driven effort resulted in a tripod strategy, where the state, state-run companies, and their private sector became the pillars of Brazil's defense industry. Brazil developed an export-driven defense industry; where close to 80–90% of its output was exported to Latin American, African, Arab, and Asian nations. In the 1980s, Brazil became the world's fifth largest exporter of defense products and services, exporting to over 40 countries. In the 1990s and 2000s, Brazil's defense industry suffered a dramatic reduction in size, diversification, and momentum. Successions of domestic political and economic policies have relegated Brazil's once emerging defense industry to a marginal position in the global defense industry. This article analyzes future prospects, challenges, and growth strategies for Brazil's defense industry. [ABSTRACT FROM AUTHOR]