The effect of product diversification strategies on the relationship between international diversification and firm performance

Shao Chi Chang, Chi Feng Wang

Research output: Contribution to journalArticle

78 Citations (Scopus)

Abstract

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.

Original languageEnglish
Pages (from-to)61-79
Number of pages19
JournalJournal of World Business
Volume42
Issue number1
DOIs
Publication statusPublished - 2007 Mar 1

Fingerprint

Firm performance
International diversification
Product diversification
Diversification strategy
Service industries
Multinational firms
Manufacturing industries
Interaction effects

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Finance
  • Marketing

Cite this

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The effect of product diversification strategies on the relationship between international diversification and firm performance. / Chang, Shao Chi; Wang, Chi Feng.

In: Journal of World Business, Vol. 42, No. 1, 01.03.2007, p. 61-79.

Research output: Contribution to journalArticle

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