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This paper examines empirically how growth opportunities determine the relationship between corporate diversification and firm's value in an emerging economy.

This study employs annual data of Indonesian manufacturing firm's spanning five years. To test the potential nonlinear relationship between diversification and value, nonlinear regression model is employed. Baron and Kenny’s (1986) procedure is also employed to test the mediation role of the growth opportunities in the relation between diversification strategy and firm's value. This study also performs further robustness analysis on mediating role of growth opportunities on the relationship between diversification strategy and corporate value using path analysis approach.

The analyses reveal the U-shaped diversification and value relationship; this result suggests that the effect of diversification on value will vary across firms, the negative effect of diversification strategy on firm's value may reverse at higher levels of diversification. Further analysis indicates that such relationship is fully mediated by firm's growth opportunities.

Given the results, firms that are considering implementing diversification strategy should seek the optimal level of diversification to gain diversification premium. Furthermore, the manager should observe the best opportunities available for the firm before undertaking the diversification strategies.

This paper contributes to the existing literature on diversification strategy by extending the insight of this research area of a large emerging economy, on which prior studies have not reached conclusive results.

This study aims to investigate the impact of international diversification on the value and operating efficiency of European real estate firms.

The study is conducted using a panel fixed effects regression model to estimate the relationship of international diversification with firm value and operating efficiency. International diversification is mainly measured via the negative of the Herfindahl–Hirschman Index (HHI) using property-level data. Firm value and operating efficiency are proxied by financial ratios observed annually from 2002 to 2021 at the firm level.

The results demonstrate that international diversification has a negative effect on firm value. Additionally, it lowers operating efficiency by weakening a firm's ability to generate operating earnings from its assets. By examining whether the reduction in operating efficiency is due to the rental income channel or the capital gains channel, the authors find strong statistical evidence that international diversification negatively impacts capital gains. International diversification is negatively associated with net gains from property valuations (unrealized capital gains) and net profits from property disposals (realized capital gains).

The empirical analysis is limited to Europe.

This paper extends the geographical diversification literature. While existing literature focuses on domestic diversification within the United States, this paper explores the effects of international diversification on European real estate firms. To the extent of the authors' knowledge, this is the first paper to examine the impact of geographical diversification on capital gains.

The purpose of this paper is to examine the financial factors across multiple levels of analysis that influence the performance effects of the unrelated diversification strategy, including institutional-, industry- and firm-levels.

Using a unique panel dataset of Italian firms from 1980 to 2010, the paper tests hypotheses on how industry external financial dependence and the firm's financial constraints both separately and jointly alter the performance benefits of unrelated diversification in contexts with financial market inefficiencies.

Unrelated diversification increases performance in weak financial contexts and such positive effect is enhanced by greater industry external financial dependence and greater firm financial constraints. However, as financial markets develop, the moderating effects of firm financial constraints shrink.

The study highlights the importance of recognizing the multiple financial contingencies that may alter the benefits of the unrelated diversification strategy, suggesting caution in its pursuit to boost firm performance.

The authors develop a theoretical framework that explains the performance outcomes of unrelated diversification, linking the benefits of an internal capital market (ICM) with the financial context of the firm and offering a fine-grained analysis that moves beyond the advanced/emerging economy dichotomy. Furthermore, leveraging on the unprecedented time frame of the empirical analysis, the paper highlights the crucial role of industry- and firm-level financial contingencies and demonstrates that their effects change at varying levels of development of the financial context.

The purpose of this study is to investigate long-run and short-run relationships between trade diversification, financial system development, capital formation and economic growth.

ARDL estimation approach is applied to analyze long-run and short-run relationships between the financial system development, capital formation, economic growth and trade diversification in case of the Sultanate of Oman over the period 39 years starting from 1979 till 2017.

The results show that financial system development and economic growth has a positive impact on trade diversification in the short-run and long-run. However, capital formation has a negative impact on trade diversification in the short run and long run. The negative relationship between trade diversification and capital formation implies that over the period of study, the investment in capital goods was made to enhance the production capacity of the oil sector to maximize revenue.

This research is limited to analyze long-run and short-run relationship between the financial system development, capital formation and economic growth and trade diversification in case of Sultanate of Oman.

To achieve the diversification goal, the policymakers need to formulate policies to strengthen the financial system and invest in infrastructure development to promote the non-oil sector. The research findings of this study will provide insights to the policymakers to formulate an effective diversification policy.

This research contributes to the existing literature by providing empirical evidence of the short-run and long-run analysis of the selected variables in the context of an oil-dependent country.

The paper investigates the market performance of strategic acquisitions for growth in the fifth and sixth merger waves and outlines the major determinants that affect the performance of acquiring companies in these most complex and most challenging corporate transactions.

To perform the quantitative analysis a unique data sample was built out of acquisitions performed in the 5th and 6th merger waves with an only single purpose – strategic growth. Their performance was first analyzed using the method of market-based event study. In addition, the impact of several non-accounting determinants identified through a thorough literature review was tested using univariate/multivariate regression analysis.

The new findings of the study state that strategic acquisitions for growth created more value for acquiring companies if they were completed internationally and involved an acquisition of a middle-sized company. Moreover, the acquisition of targets in the less related industries (2-SIC) led to stronger performance of acquirers, especially in the international settings.

The study suggests additional directions for future research. The future analysis can investigate the post-merger acquisition performance of strategic acquirers and can focus on additional financial (accounting) determinants in the evaluation of performance. This perspective can not only address the limitations imposed by the assumption of efficient capital markets but also provide additional insights.

The results of current study have important implications for executives performing M&A for growth. They show that the market reaction to M&A announcement can be at least partially anticipated and help managers to plan their strategic moves based on a defined set of variables.

The study contributes to the sustainable, value-creating growth dynamics and encourages Executives to “lead for value.”

(1) In contrast to the existing studies that do not differentiate between the transaction rationale in their analysis, this paper focuses explicitly only on those acquisitions that have strategic growth as their primary objective and responses therefore, to the problem stated by Halpern (1983). This approach helps to mitigate the distortion of results and make a reliable assessment of the strategic move. (2) The results of quantitative analysis also outline that acquisition of mid-sized targets and larger degree of diversification (2-SIC, international focus) code were associated with higher value creation.

本文旨在研究於第五和第六波的併購浪潮中為增長而作出的策略性收購的市場表現;本文亦概述在這些極其複雜的和極具挑戰性的公司交易中影響作收購公司的表現的主要因素.

為了能進行定量分析,研究人員收集在第五及第六波的併購浪潮中以策略性增長為唯一目的的收購個案、建立一個獨特的數據樣本。研究人員首先以基於市場的事件研究法分析那些進行了收購的公司的表現,並以單變量/多變項迴歸分析法去試驗那幾個透過深入的文獻研究而找到的非會計的決定因素的影響.

研究得出的新發現是、如果以增長為目的的策略性收購是於國際間完成及涉及收購中型公司的話,則這收購行動會給進行收購的公司帶來更多價值。而且、如果收購目標的產業與作收購公司的不太相關的話 (2-標準產業分類),收購行動會為進行收購的公司帶來更強的表現、特別是在國際環境下進行這收購行動.

(1) 有別於現時其它於其分析中不區分交易理由的研究，本文明確地表示只集中探討那些以帶來策略性增長為主要目標的收購；因此、本研究對 (哈爾彭，1983年)(Halpern, 1983) 陳述的問題作出了回應。本研究的理念有助於減輕我們對收購結果的曲解，從而讓我們對策略性行動能作出可靠的評估. (2) 定量分析的結果、亦概述了以中型公司為目標的收購及更大程度的多樣化 (2－標準產業分類、以國際為焦點) 代碼與創造更大價值是有關聯的。

本研究的結果對學術界及管理人員均具吸引力，亦為策略規劃提供一個額外的工具.

本研究可帶來可持續的及可創造價值的增長動力，又可鼓勵行政主管採用以價值為本的領導方針.

This study aims to analyse how multinational corporations (MNCs) organise value chain activities to penetrate new market segments. It contributes by expanding traditional decisions regarding the vertical fine-slicing of value chain activities (whether performed internally or externally) and the consideration of resource-sharing decisions (integration or separation) for each value chain function.

The authors draw on primary data collected from two case study firms operating in the large emerging Chinese market: Volvo Construction Equipment AB and Epiroc AB. In-depth cases illustrate how foreign MNCs expand into new market segments and simultaneously target both the lower-priced mid-market and the premium segments in the Chinese mining and construction industry.

The results reveal that product diversification creates challenges for managers who must oversee new (vertical) value chains, often simultaneously. Beyond geography and modes of governance, managers must decide whether to integrate or separate value chain activities for the new product lines. The study identifies four main strategic choices for firms to address this complexity, focusing on the decision to internalise or externalise (i.e. within or across organisational boundaries) and integrate or separate value chain activities between different product lines.

This study builds upon the internalisation theory and recent international business contributions that focus on value chain configurations to explain MNCs’ product diversification as a growth strategy in a host emerging market. It also sheds light on the choice of conducting new activities in-house or externally and elucidates firms’ managerial decisions to operationally integrate or separate individual value chain activities. The study provides insights into the drivers explaining managerial decisions to configure value chain activities across product lines and contributes to the growing body of literature on MNC activities in emerging economies by highlighting that product diversification impacts entry mode diversity and resource sharing across units.

The purpose of this paper is to examine the impact of intellectual capital and its components on bank diversification choice.

Both asset and income diversification are computed and an unbalanced panel data set of 32 banks covering the period 2000–2015 have been used. The panel corrected standard error regression has been used to account for serial correlation and heteroscedasticity.

The study found that intellectual capital determines the choice of diversifying. Precisely, intellectual capital motivates asset diversity but it dissuades income diversification. Human capital and structural capital are major components that determine asset diversity decisions. Income diversification decision, in this case to choose a focus strategy, is determined by human capital. This gives credence for the human capital theory in Ghana. Competition encourages a focus strategy. Bank size and leverage enhances income diversification while stock exchange listing and government ownership fosters the focus strategy.

Diversification strategy, knowledge base of staff, corporate governance and internal control have been considered as factors leading to the collapse of some Ghanaian banks in 2017–2018. The study provides relevant insights for regulators, decision support units and corporate boards. Intellectual capital and value added metrics should be used for modelling and decision making as they have value relevance.

This is a premier study that has examined the nexus between diversification strategy and intellectual capital in banks.

The study aims to fill a gap in the literature on the economic impact of industrial and international diversification on firm performance in the energy sector. Li et al. (2016) investigate firms listed in China, and this study analyzes firms listed in (Western) Europe.

A sample of 129 energy firms is extracted from Datastream and covers the period from January 2009 to December 2015. Univariate and multivariate regression analyses are used to determine a plausible relation of diversification on corporate performance. Also, the difference between renewable energy firms and conventional energy firms is explored.

A univariate analysis using both return on assets and Tobin's Q as a variable shows that renewable energy firms have a higher profitability than conventional energy firms. However, a multivariate analysis does not confirm this result. The authors also document a negative relation between diversification strategies and firm performance.

The study uses main industry codes. Yet, one might make a distinction between renewable energy and conventional energy amounts with corporations. Also, the authors cover financial crisis years. Researchers might take into account more recent years.

The findings of the study highlight the importance of short-term and long-term considerations for practitioners related to demand, the energy mix, oil prices and firm strategies.

The authors contribute to the debate and the literature when identifying similarities and differences between conventional energy firms and renewable energy firms in their application of diversification strategies and their (relation to) firm performance.

The international trade literature has established that export product diversification lowers export product revenue instability. The current analysis investigates whether this finding carries over services exports.

The empirical analysis covers a sample of 152 countries over the period 1980–2014 and employs the two-step system generalized method of moments (GMM) approach.

The empirical findings indicate that services export diversification reduces services export revenue instability both over the full sample as well as over sub-samples of high-income countries (HICs), least developed countries (LDCs) as well as developing countries (i.e. non-HICs) that are not LDCs. HICs appear to experience a higher positive effect of services export diversification on services export revenue instability than in developing countries. The analysis also shows that countries that further open-up to international trade enjoy a greater reducing effect of services export diversification on the instability of services export revenue.

This analysis, therefore, adds to the existing studies on the relationship between export product diversification and the instability of revenue derived from goods exports by focusing on the services export side. An important message from the analysis is that countries that diversify their services export basket enjoy lower services export revenue instability when they further integrate into the world trade market.

This study highlights the importance of services export diversification, including for stabilizing services export revenue to services traders. Diversifying services export items, including across traditional and modern services sectors involves the implementation of a wide range of policies and measures, of which the liberalization of the services sectors through reduction and eventually the elimination of services trade barriers; the improvement of the business environment and the development of domestic financial markets (see for example, Hoekman, 2017). It could be interesting that another study consider policies and measures that could promote services export diversification.

To the best of the authors’ knowledge, this is the first time this topic is being addressed, including empirically.

This paper aims to explore the effects of bank diversification (i.e. diversification of income and diversification of assets) on Bangladeshi banks’ profitability.

Using a dynamic panel data model with system generalized methods of moments, the authors examine an unbalanced panel data from 32 banks spanning 318 bank-year observations from 2007 to 2016.

The findings indicate a significant positive association of income diversification and asset diversification on bank profitability. Therefore, the results show that banks can generate profit from diversification of income and diversification of assets.

One of the rare attempts to investigate the relationship between diversification and profitability in Bangladesh’s banking sector is this report. The authors anticipate the results to have major consequences for Bangladeshi bank regulators and other related economies.