Business group diversification, financial constraints and firm performance: the case of Tunisian group affiliated firms

Dorra Ellouze () and Khadija Mnasri ()
Additional contact information
Dorra Ellouze: Univ. Manouba
Khadija Mnasri: Institut Supérieur de Gestion de Tunis

Journal of Management & Governance, 2020, vol. 24, issue 1, No 10, 273-301

Abstract: Abstract In this paper, we analyze the effect of business group diversification on firms’ performance and we examine whether this effect is particularly relevant for financially constrained firms. We assess these relations using a unique hand-collected database of 67 Tunisian non-financial firms affiliated with business groups during the period of 1998–2016. We provide evidence that there is a quadratic U-shaped relationship between group diversification and firms’ performance (measured by the return on assets and the Tobin’s Q ratios), suggesting that group diversification enhances affiliated firms’ performance only if it exceeds a certain threshold. Our results also show that a high level of business group diversification is particularly beneficial for firms that suffer financial constraints.

Keywords: Business groups; Diversification; Performance; Financial constraints (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://link.springer.com/10.1007/s10997-019-09454-4 Abstract (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:jmgtgv:v:24:y:2020:i:1:d:10.1007_s10997-019-09454-4

Ordering information: This journal article can be ordered from
http://www.springer. ... 29/journal/10997/PS2

DOI: 10.1007/s10997-019-09454-4

Access Statistics for this article

Journal of Management & Governance is currently edited by Lino Cinquini

More articles in Journal of Management & Governance from Springer, Accademia Italiana di Economia Aziendale (AIDEA) Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().