Diversification strategy, efficiency, and firm performance: Insight from emerging market

Alex Kwaku Gyan, Rayenda Brahmana and Bakri Abdul Karim

Research in International Business and Finance, 2017, vol. 42, issue C, 1103-1114

Abstract: We investigate further the inconsistencies of the diversification-performance link by introducing efficiency as moderating factor. A data of 319 firms was used to conduct a panel data analysis excluding the financial sector industries and the results show three important findings. First, industrial diversification shows a significant contribution in performance improvement while international diversification shows no effect on performance. Yet, international-conglomerate shows a significant negative relationship with performance. Meanwhile, the efficiency results are contrary to our conjecture. We find that efficiency is a factor to enhance performance, but it is not the moderating variable on the diversification-performance link. This implies that the efficiency of the firm has no connection with the link between diversification and performance.

Keywords: Diversification; Efficiency; Firm performance; Corporate strategy (search for similar items in EconPapers)
Date: 2017
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:42:y:2017:i:c:p:1103-1114

DOI: 10.1016/j.ribaf.2017.07.045

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