TY - JOUR
T1 - The effect of product diversification strategies on the relationship between international diversification and firm performance
AU - Chang, Shao Chi
AU - Wang, Chi Feng
N1 - Funding Information:
The authors wish to thank two anonymous referees, Gregory G. Dess (the Editor), Eshghi, G.S., Meyer, K., the seminar participants at the 2005 Academy of International Business Annual Meeting and 2005 Research Workshop of the National Science Council for their helpful comments and suggestions. Shao-Chi Chang acknowledges funding from the National Science Council in Taiwan (94-2416-H-006-028).
PY - 2007/3
Y1 - 2007/3
N2 - Previous studies have provided mixed evidence on the interaction effect of product and international diversification on firm performance. This study extends this stream of research by investigating the differential impacts of product diversification strategies on the relationship between international diversification and firm performance. We find that while related product diversification positively influences the performance of multinational firms, unrelated product diversification negatively moderates the international diversification-performance relationship. The evidence is robust for different models of international diversification and firm performance, and holds for firms in both the service and manufacturing industries. Our findings highlight the importance of distinguishing different product diversification strategies, and provide a potential explanation for prior mixed evidence.
AB - Previous studies have provided mixed evidence on the interaction effect of product and international diversification on firm performance. This study extends this stream of research by investigating the differential impacts of product diversification strategies on the relationship between international diversification and firm performance. We find that while related product diversification positively influences the performance of multinational firms, unrelated product diversification negatively moderates the international diversification-performance relationship. The evidence is robust for different models of international diversification and firm performance, and holds for firms in both the service and manufacturing industries. Our findings highlight the importance of distinguishing different product diversification strategies, and provide a potential explanation for prior mixed evidence.
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U2 - 10.1016/j.jwb.2006.11.002
DO - 10.1016/j.jwb.2006.11.002
M3 - Article
AN - SCOPUS:33846388537
SN - 1090-9516
VL - 42
SP - 61
EP - 79
JO - Journal of World Business
JF - Journal of World Business
IS - 1
ER -