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The Impact of Diversification Strategies and Operational Capabilities on Financial Performance in Thai Professional Service Firms

Author

Listed:
  • Usarat Thirathon

    (Faculty of Business Administration, Kasetsart University, Bangkok, Thailand)

  • Supawat Meeprom

    (Faculty of Business Administration and Accountancy, Khon Kaen University, Khon Kaen, Thailand)

Abstract

Professional service sector plays a crucial role in the world economy, especially in emerging countries. This research explores the impact of diversification strategies and operational capabilities on financial performance in Thai professional firms. Financial data of 96 companies in the service sector listed on the Stock Exchange of Thailand (SET) was collected. Partial Least Squares (PLS) regression was selected as an analysis method. The results find that service diversification strategy, but not international diversification strategy, has a significant effect on a firm’s financial performance. The empirical findings support the importance of diversification strategies. The result also show that operational capabilities have a significant negative impact on a firm’s financial performance.

Suggested Citation

  • Usarat Thirathon & Supawat Meeprom, 2020. "The Impact of Diversification Strategies and Operational Capabilities on Financial Performance in Thai Professional Service Firms," International Journal of Business and Administrative Studies, Professor Dr. Bahaudin G. Mujtaba, vol. 6(1), pages 21-30.
    • Handle: RePEc:apa:ijbaas:2020:p:21-30
    DOI: 10.20469/ijbas.6.10003-1
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    References listed on IDEAS

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