Journal article
A Re-Examination of Diversification and Firm Productivity
Journal of management accounting research, v 25(1), pp 99-118
01 Sep 2013
Abstract
The advantages and disadvantages of diversification have been widely debated by academics, as well as business professionals, and the majority of studies suggest that diversification destroys firm value. The effect of overall diversification (without categorizing whether such diversification is related or unrelated to the business) on productivity has been investigated as well, but with similar conflicting results. In this paper, we investigate the effects of the two types of diversification on productivity. We find that related diversification enhances firm productivity, whereas unrelated diversification reduces firm productivity. We also find that the previously recorded link between diversification and firm value is partially mediated by productivity. Our paper offers further empirical evidence toward resolving the conflicting findings of prior research, and provides practitioners with additional points for consideration when engaging in firm diversification.
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Details
- Title
- A Re-Examination of Diversification and Firm Productivity
- Creators
- Hsihui Chang - Drexel UniversityGuy D. Fernando - University at Albany, State University of New YorkDhinu Srinivasan - University of PittsburghArindam Tripathy - University of Washington Tacoma
- Publication Details
- Journal of management accounting research, v 25(1), pp 99-118
- Publisher
- Amer Accounting Assoc
- Number of pages
- 20
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Accounting
- Web of Science ID
- WOS:000216392900007
- Scopus ID
- 2-s2.0-84904092185
- Other Identifier
- 991019168876704721
InCites Highlights
Data related to this publication, from InCites Benchmarking & Analytics tool:
- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Business, Finance