Home Country Environments, Corporate Diversification Strategies, and Firm Performance

2003 ◽  
Vol 46 (1) ◽  
pp. 27-45 ◽  
Author(s):  
William P. Wan ◽  
Robert E. Hoskisson
Keyword(s):  
Firm Performance ◽  
Home Country ◽  
Corporate Diversification ◽  
Diversification Strategies

Ownership Structure and Corporate Diversification

2006 ◽  
Vol 8 (1) ◽  
pp. 1-19 ◽  
Author(s):  
Yi Zhang ◽  
Xi Li
Keyword(s):  
Firm Performance ◽  
Local Government ◽  
Ownership Structure ◽  
Central Government ◽  
Agency Problems ◽  
State Ownership ◽  
Corporate Diversification ◽  
Listed Firms ◽  
Firm Diversification ◽  
Diversification Strategies

This paper examines the motivation and impact of corporate diversification in Chinese listed firms. We find that in local government owned-firms there is a non-linear relationship between the level of firm diversification and state ownership. As state ownership increases from zero, the level of diversification decreases. After state ownership reaches a certain level, the level of diversification increases as state ownership increases. There is no evidence that ownership is related to corporate diversification in non-state-owned firms or central government-owned firms. We also document that diversification is negatively related to firm performance in local government-owned firms. However, there is no evidence that diversification is negatively related to the firm performance in non-state-owned firms or central government-owned firms. Our findings suggest that agency problems are responsible for local government owned-firms taking value-reducing diversification strategies.

scholarly journals Geographic Scope and Real Estate Firm Performance during the COVID-19 Pandemic

2021 ◽  
Vol 14 (7) ◽  
pp. 309
Author(s):  
Xiaoling Chu ◽  
Chiuling Lu ◽  
Desmond Tsang
Keyword(s):  
Firm Performance ◽  
Real Estate ◽  
Stock Market ◽  
Adverse Impact ◽  
Corporate Diversification ◽  
Market Reactions ◽  
Geographic Scope ◽  
The Real Estate ◽  
Real Estate Sector ◽  
Stock Market Reactions

This study examines the effect of geographic scope in mitigating the adverse impact of the COVID-19 pandemic in the real estate sector. Utilizing the Chinese setting over the two-month period in 2020 from the beginning of the outbreak to the successful containment of the spread of virus, we show that while the pandemic has negatively impacted real estate firm returns, firms with broader geographic scope and more geographically diversified property allocations have managed to better endure the crisis. We further find that firms with higher leverage report lower returns during the pandemic irrespective of their geographic scope, but larger firms can lessen the adverse impact of the pandemic only if they have adopted a more diversified strategy. Overall, our study provides novel evidence on the benefit of diversification by demonstrating the importance of geographic scope and diversification at times of crises. Specifically, we show corporate diversification could be especially useful to mitigate the negative stock market reactions resulting from the pandemic. Moreover, diversification could even become essential for larger firms that are expected by the market to be more diversified.

Do corporate diversification and earnings management practices affect capital structure?

2015 ◽  
Vol 7 (4) ◽  
pp. 360-378 ◽  
Author(s):  
Ranjitha Ajay ◽  
R Madhumathi
Keyword(s):  
Capital Structure ◽  
Earnings Management ◽  
Management Practices ◽  
Negative Relationship ◽  
Corporate Diversification ◽  
Content Type ◽  
Diversification Strategies ◽  
Market Product ◽  
Diversified Firms ◽  
The Impact

Purpose – The purpose of this paper is to empirically examine the impact of earnings management on capital structure across firm diversification strategies. Design/methodology/approach – The study focuses on firms operating in the manufacturing sector (diversified and focused). Panel data methodology compares diversification strategies and identifies the impact of diversification strategy with earnings management practices on capital structure decision. Findings – International and product diversified firms have lower levels of leverage than focused firms in their capital structure. Asset-based earnings management is positive for diversified (market/product) firms. Earnings management using discretionary expenditure (project based) is found to be higher for market diversified but product-focused firms. Earning smoothing method is found to be significant for focused firms and shows a negative relationship with capital structure. Originality/value – This study offers an insight into the relationship between corporate diversification, earnings management and capital structure decisions of manufacturing firms. The results provide an important contribution to accounting and strategy literature. A distinction is made between market- and product-diversified firms and influence of earnings management practices (asset-based, project-based and earnings smoothing (ESM)) on capital structure decisions. Diversified firms (market/product) tend to have lower levels of leverage than focused firms and earnings management practices within firm groups significantly influence the capital structure decisions.

Corporate diversification strategies and capital structure

2003 ◽  
Vol 43 (1) ◽  
pp. 147-167 ◽  
Author(s):  
Manohar Singh ◽  
Wallace N Davidson ◽  
Jo-Ann Suchard
Keyword(s):  
Capital Structure ◽  
Corporate Diversification ◽  
Diversification Strategies
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