Postal Industry Diversification: Exploring New Worlds and Facing New Regulations

The impact of within-industry diversification on firm performance

International Journal of Emerging Markets ◽

10.1108/ijoem-05-2017-0174 ◽

2018 ◽

Vol 13 (6) ◽

pp. 1475-1501 ◽

Cited By ~ 2

Author(s):

Varaporn Pangboonyanon ◽

Kiattichai Kalasin

Keyword(s):

Financial Performance ◽

Positive Impact ◽

Labor Costs ◽

Institutional Perspective ◽

Product Lines ◽

Content Type ◽

Linear Pattern ◽

Coordination Costs ◽

Industry Diversification ◽

The Impact

Purpose The purpose of this paper is to investigate how within-industry diversification affects the financial performance of small- and medium-sized enterprises (SMEs) in emerging markets (EMs). The authors draw on both the resource-based view and the institutional perspective and argue that within-industry diversification can enhance the financial performance of SMEs in EMs. Due to institutional voids in emerging economies, SMEs can gain additional benefits from scope economies, as well as from market returns, by filling product market voids and gaps in business ecosystems, while also enjoying low input and labor costs that reduce the coordination costs of diversification. This, in turn, enhances benefits of within-industry diversification, thereby resulting in higher financial profitability. Design/methodology/approach This study employs panel data econometrics to estimate the model. The authors test hypotheses on 195 firms, originating from five countries in Southeast Asia, during the period of 2009–2014. Findings The empirical results support the arguments. Within-industry diversification has a positive impact on the performance of SMEs in EMs. These effects become weaker when the institutional contexts are more developed. Nevertheless, such effects become stronger when SMEs in EMs are more efficient. Research limitations/implications The relationship between within-industry diversification and performance is a positive linear pattern, which differs from the pattern in advanced economies. In addition to unrelated diversification, the related diversification is preferable for firms in EMs. Practical implications The paper provides implications for SMEs that aim to enhance their performance by engaging in single product lines and within-industry diversification. Originality/value This paper examines the different ways within-industry diversification can enhance SMEs performance in EM contexts.

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The Accuracy of Financial Analysts' Forecasts after Mergers

Journal of Accounting Auditing & Finance ◽

10.1177/0148558x9400900306 ◽

1994 ◽

Vol 9 (3) ◽

pp. 465-483 ◽

Cited By ~ 35

Author(s):

In-Mu Haw ◽

Kooyul Jung ◽

William Ruland

Keyword(s):

Financial Analysts ◽

Forecast Accuracy ◽

Capital Intensity ◽

Financial Leverage ◽

Prediction Bias ◽

Before And After ◽

Intensity Changes ◽

Industry Diversification

This paper examines forecasts developed by financial analysts before and after mergers. The study finds that forecast accuracy decreases sharply after mergers. These accuracy reductions tend to be more pronounced when financial leverage changes, when the merger does not provide earnings or industry diversification, when the purchase method of accounting is used to record the transaction, when capital intensity changes, and when the size of the target corporation is large compared to the size of the acquiring corporation. The data also show that reductions in forecast accuracy after mergers tend to be temporary. Accuracy returns to approximately the premerger level within four years after the merger. The study also finds that overprediction bias increases sharply in the year immediately following the merger. This increase in over-prediction bias, however, is also temporary. Overprediction bias returns to approximately the premerger level within the four-year postmerger study period.

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