The effect of product diversification strategies on the relationship between international diversification and firm performance

2007 ◽  
Vol 42 (1) ◽  
pp. 61-79 ◽  
Author(s):  
Shao-Chi Chang ◽  
Chi-Feng Wang
Keyword(s):  
Firm Performance ◽  
International Diversification ◽  
Product Diversification ◽  
Diversification Strategies ◽  
The Relationship

scholarly journals The combined effects of product and geographical diversification on performance: Evidence in manufacturing SMEs

2020 ◽  
Vol 23 (2) ◽  
pp. 91-106
Author(s):  
Diana Benito-Osorio ◽  
Alberto Colino ◽  
Luis Ángel Guerras-Martín ◽  
José Ángel Zúñiga-Vicente
Keyword(s):  
International Diversification ◽  
Jel Classification ◽  
Dynamic Panel Data ◽  
Product Diversification ◽  
Diversification Strategy ◽  
Diversification Strategies ◽  
Statistical Support ◽  
And Performance ◽  
The Individual ◽  
Geographical Diversification

This study explores both the individual impact of geographical diversification and its effect combined with product diversification on small and medium-sized enterprises’ (SMEs) performance. Unlike most prior studies, this study distinguishes between related and unrelated product diversification. The research setting is a sample of manufacturing SMEs (1994–2014). By using dynamic panel data models, the results provide statistical support for the existence of a horizontal S-shaped relationship between geographical diversification and performance. The findings also indicate that while related product diversification positively enhances the performance of those SMEs engaged in geographical diversification (albeit not indefinitely), unrelated product diversification may significantly impair it, especially for SMEs opting for low and high levels of international diversification. Our study reveals that product and international diversification strategies in the case of SMEs are complementary or substitutive strategies depending on the specific type of product diversification strategy and the level of geographical diversification adopted. JEL CLASSIFICATION: F23; L25; M16

scholarly journals Corporate Diversification and CEO Compensation: Evidence from the Moderating Effect of Firm Performance

2020 ◽  
Vol 27 (2) ◽  
pp. 49
Author(s):  
Hwei Cheng Wang ◽  
Ya Ying Chou Yeh ◽  
Michael D. Slaubaugh ◽  
Chih Chi Fang
Keyword(s):  
Firm Performance ◽  
Significant Influence ◽  
Ceo Compensation ◽  
International Diversification ◽  
Negative Influence ◽  
Moderating Effect ◽  
Corporate Diversification ◽  
Negative Effect ◽  
The Relationship

This study explores whether firm performance moderates the relationshipbetween corporate diversification and CEO compensation. A sample of 2,448 CEOcompensations across 1,622 firms from 1997 to 2002 was used to test several hypotheses.Corporate diversification was divided into two categories (international and industry) andfirm performance was defined using both market-based and accounting-based measures.For the relationship between international diversification and CEO compensation, ourresults indicate that both market-based and accounting-based firm performance had asignificant negative effect on that relationship. Furthermore, accounting-based firmperformance was a better predictor of international diversification and CEOcompensation than market-based firm performance. For the relationship betweenindustry diversification and CEO compensation, however, our results show that onlymarket-based firm performance had a significant negative influence whereas accountingbased firm performance did not have any significant influence.

Foreign ownership and performance: mediating and moderating effects

2019 ◽  
Vol 29 (2) ◽  
pp. 86-102
Author(s):  
Vicky Ching Gu ◽  
Ray Qing Cao ◽  
John Wang
Keyword(s):  
Firm Performance ◽  
International Diversification ◽  
Foreign Ownership ◽  
Competitive Environment ◽  
Organizational Strategies ◽  
Content Type ◽  
Financial Measures ◽  
And Performance ◽  
The Impact ◽  
The Relationship

Purpose Although foreign ownership has been widely studied to show its impact on firm performance, the findings are mixed and the underlying rational to explain the impact is not entirely clear. The purpose of this study is to determine if there is a direct relationship between foreign ownership and performance or if this relationship is indirect and affected by mediating and moderating variables such as international diversification and competitive environment. Design/methodology/approach Financial data, survey data and other financial measures for known indices are used in the research, and SPSS and SEM (Stata 15) analyses are used to test empirically derived hypotheses. Findings Results from this study indicate that the relationship between foreign ownership and firm performance is mediated by international diversification, such that higher levels of both foreign corporate and foreign institutional ownership lead to higher levels of international diversification, which then lead to higher levels of firm performance. Results from this study also indicate that the competitive environment moderates the relationship between a firm’s level of international diversification and performance, such that the effect of international diversification on performance is greater as the environment becomes more competitive. Practical implications This study provides empirical evidence for managers to seriously consider the impact of foreign ownership on decisions involving international diversification, along with competitive environment, when formulating and implementing organizational strategies. Originality/value This study extends prior research examining the effects of foreign ownership on firm performance by uniquely showing how international diversification mediates the relationship between foreign ownership and firm performance and how the competitive environment moderates the relationship between international diversification and firm performance.

Internationalisation and financial performance: in the case of global automotive firms

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Rozaimah Zainudin ◽  
Nurul Shahnaz Mahdzan ◽  
Norzulkarnien Nor Mohamad
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Automotive Industry ◽  
Product Diversification ◽  
Content Type ◽  
Return On Equity ◽  
Advertising Intensity ◽  
Return On Capital ◽  
Market Capitalisation ◽  
The Relationship

Purpose Given the mixed evidence on the relationship between internationalisation and firm performance, the purpose of this study is to investigate the effect of internationalisation on the financial performance in the setting of a matured and stagnant market, the global automotive industry. Design/methodology/approach The study uses 37 automotive manufacturers covering from 2000 to 2015. Panel regression analyses were used to estimate the relationship between four financial performance variables (return on equity [ROE], return on asset [ROA], return on capital [ROC] and return on sales [ROS]) and three main independent variables (foreign assets to total assets [FATA], research and development intensity [RNDi], advertising intensity [ADVi]), controlling for product diversification, firm size, age and risk. Findings The findings reveal that automotive firms with a lower FATA ratio, lower RNDi and higher ADVi tend to achieve higher financial performance. However, the intensity of product diversification does not influence the financial performance of global automakers. Ceteris paribus, larger firms in terms of market capitalisation and new entrants into the market tend to have higher financial performance relative to smaller and older firms. Originality/value This study contributes to the literature first by examining the relationship between internationalisation and firm performance in the setting of a matured market, i.e. the automotive industry. Secondly, the paper uses a multinational sample at a global level; and third, it analyses financial performance on a comprehensive basis via four measures, namely, ROA, ROE, ROC and ROS, as the dependent variables.

scholarly journals A RESOURCE-BASED PERSPECTIVE ON THE RELATIONSHIP BETWEEN SERVICE DIVERSIFICATION AND FIRM PERFORMANCE: EVIDENCE FROM ITALIAN FACILITY MANAGEMENT FIRMS

2012 ◽  
Vol 13 (3) ◽  
pp. 567-585 ◽  
Author(s):  
Claudio Giachetti
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Competitive Advantage ◽  
Service Industry ◽  
Facility Management ◽  
Firm Financial Performance ◽  
Diversification Strategies ◽  
And Performance ◽  
Levels Of Service ◽  
The Relationship

In this article, a theoretical framework to study the effect of service diversification on firm financial performance is demonstrated. Data on 48 Italian facility management firms from between 2000 and 2009 show a consistent inverse U-shaped relationship between service diversification and firm performance, with the slope positive at low and moderate levels of service diversification but negative at high levels of service diversification. Further, the results show that firm experience in the service industry and firm affiliation to a consortium positively moderate the relationship between service diversification and performance. The results of this study provide evidence of the importance of service diversification strategies for gaining a competitive advantage.

The moderating effect of board size on the relationship between diversification and tourism firm performance

2019 ◽  
Vol 25 (7) ◽  
pp. 1084-1104 ◽  
Author(s):  
Chen Zheng ◽  
Henry Tsai
Keyword(s):  
Firm Performance ◽  
Tourism Industry ◽  
Moderating Effect ◽  
Diversification Strategy ◽  
Board Size ◽  
Unrelated Diversification ◽  
Diversification Strategies ◽  
Related Diversification ◽  
The Relationship

This study examines the effects of diversification strategy and board size on firm performance as well as the moderating effect of board size on the relationship between diversification strategy and firm performance in the Chinese tourism industry from 2008 to 2015. The results show that related diversification positively influenced Chinese tourism firm performance, and unrelated diversification negatively influenced it. Board size was found to negatively moderate the relationship between related diversification and firm performance and to positively moderate the relationship between unrelated diversification and firm performance. In addition, the results imply that small boards are beneficial to Chinese tourism firms when both related and unrelated diversification strategies are implemented.

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