The Impact of Diversification Strategies and Operational Capabilities on Financial Performance in Thai Professional Service Firms

Usarat Thirathon and Supawat Meeprom
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Usarat Thirathon: Faculty of Business Administration, Kasetsart University, Bangkok, Thailand
Supawat Meeprom: Faculty of Business Administration and Accountancy, Khon Kaen University, Khon Kaen, Thailand

International Journal of Business and Administrative Studies, 2020, vol. 6, issue 1, 21-30

Abstract: Professional service sector plays a crucial role in the world economy, especially in emerging countries. This research explores the impact of diversification strategies and operational capabilities on financial performance in Thai professional firms. Financial data of 96 companies in the service sector listed on the Stock Exchange of Thailand (SET) was collected. Partial Least Squares (PLS) regression was selected as an analysis method. The results find that service diversification strategy, but not international diversification strategy, has a significant effect on a firm’s financial performance. The empirical findings support the importance of diversification strategies. The result also show that operational capabilities have a significant negative impact on a firm’s financial performance.

Keywords: Firm performance; professional service firms; diversification strategy; operational capability (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:apa:ijbaas:2020:p:21-30

DOI: 10.20469/ijbas.6.10003-1

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