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The purpose of this paper is to provide a systematic comparison of the level of business diversification in China and eight other large economies for the 2001‐2005 period. The reasons why publicly listed Chinese firms are more diversified than companies elsewhere are investigated.

Data were collected on the number of business segments in which publicly traded companies operate from the Thomson One Banker database and analyzed using non‐parametric tests and regression analysis.

The mean number of business segments per firm varies significantly by country. Notably, there is no evidence in the authors' sample that emerging‐market companies are systematically more diversified than their developed‐market counterparts. In most countries, firms have become less diversified over time. However, there is no such trend in China. The level of diversification of Chinese enterprises does not vary over the authors' study period (2001‐2005), making Chinese firms the most diversified in the sample by 2005. China's growth rate does not seem to explain the higher level of firm diversification. However, the authors find that Chinese state‐owned enterprises (SOEs) diversify their operations more aggressively than other Chinese firms.

Ownership data and business group affiliations were not available for all firms in the sample, making it difficult to control for these effects across economies. The study's findings are limited to publicly traded firms.

Government involvement in SOEs may be contributing to a divergence in the pattern of business diversification between China and other economies.

This paper quantifies anecdotal evidence that Chinese firms are more diversified than similar firms in other countries.

This paper aims to clarify the factors that affect the formation of organizational human capital competitive advantage (OHCCA) and construct its structural dimensions.

This research method adopted grounded theory using 20 interviews of managers from 10 companies. Relevant literature was reviewed to conduct open coding, Axial coding and selective coding to ensure OHCCA concept and dimensions.

Studies have shown that OHCCA formation of results from investment and collaboration of three levels: organization, teams and departments and employees. OHCCA formation is composed of three dimensions of organizational human capital investment: planning, practice and stock.

This research enriches the organizational human capital and competitive advantage theories.

The practical significance is to provide theoretical and practical guidance for organizations in creating OHCCAs.

This research is the first to propose and define the OHCCA concept and construct a three-dimensional structure model. Furthermore, this research has revealed the leading factors that affect OHCCA's formation process.