Diversification Strategy and Firm Performance: Evidence from Indian Manufacturing Firms

Saptarshi Purkayastha

Global Business Review, 2013, vol. 14, issue 1, 1-23

Abstract: While many scholars have examined the business group affiliation–performance relationship, very few have examined the role that industry and diversification (related versus unrelated) strategy plays in this focal relationship (Carney et al., 2011). I provide empirical evidence that the effect of diversified business groups on the performance of affiliated firms is dependent on ( a ) the industry to which the firm belongs and ( b ) the type of diversification strategy followed by the group. I have found that in the chemical and allied products industry, the return on total assets (ROA) of firms has a negative relationship with unrelated diversification, while it has a positive relationship in the transportation equipment industry. However, with related diversification, ROA of firms in the chemical and allied products industry has a positive relationship, while it has a negative relationship with firms in the transportation equipment industry.

Keywords: Business groups; related diversification; unrelated diversification; firm performance; emerging economies (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://journals.sagepub.com/doi/10.1177/0972150912466363 (text/html)

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:sae:globus:v:14:y:2013:i:1:p:1-23

DOI: 10.1177/0972150912466363

Access Statistics for this article

More articles in Global Business Review from International Management Institute
Bibliographic data for series maintained by SAGE Publications ().