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The impact of product diversification strategy on the corporate performance of large Spanish firms

Author

Listed:
  • Marisa Ramírez Alesón

    (Department of Business Management, University of Zaragoza, Gran Via 2, 50005 Zaragoza, Spain)

  • Manuel Espitia Escuer

    (Department of Business Management, University of Zaragoza, Gran Via 2, 50005 Zaragoza, Spain)

Abstract

We analyze the impact of product diversification on performance. This topic has been discussed in the literature, and there is no consensus so far as to the significance or the direction of the impact. Performance is measured using Tobin's q for a sample of 103 large, non-financial Spanish firms (1992-1995). Diversification is measured by means of a categorical variable, as suggested by Varadarajan. The principal results indicate that the firms with intermediate levels of product diversification have the highest performance, while the firms with low and high levels of diversification show significantly lower performance, which performance is not significantly different between them.

Suggested Citation

  • Marisa Ramírez Alesón & Manuel Espitia Escuer, 2002. "The impact of product diversification strategy on the corporate performance of large Spanish firms," Spanish Economic Review, Springer;Spanish Economic Association, vol. 4(2), pages 119-137.
    • Handle: RePEc:spr:specre:v:4:y:2002:i:2:p:119-137
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    Citations

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    Cited by:

    1. Gawlik, Remigiusz, 2009. "Strategic Decision Making in Times of Global Financial Crisis," MPRA Paper 45407, University Library of Munich, Germany.
    2. K. Raabe & I. Arnold & C.J.M. Kool, 2006. "Firm Size and Monetary Policy Transmission: A Theoretical Model on the Role of Capital Investment Expenditures," Working Papers 06-14, Utrecht School of Economics.
    3. Zúñiga-Vicente, José Ángel & Benito-Osorio, Diana & Guerras-Martín, Luis Ángel & Colino, Alberto, 2019. "The effects of international diversification on the link between product diversification and performance in a boom and bust cycle: Evidence from Spanish firms (1994–2014)," Journal of International Management, Elsevier, vol. 25(4).
    4. Yang, Yang & Cao, Yang & Yang, Li-Ting (Grace), 2017. "Product diversification and property performance in the urban lodging market: The relationship and its moderators," Tourism Management, Elsevier, vol. 59(C), pages 363-375.
    5. Gawlik, Remigiusz, 2019. "Ranking of company performance indicators for managerial decision making purposes with application of the Delphi method," MPRA Paper 96681, University Library of Munich, Germany.
    6. Dina Patrisia & Shabbir Dastgir, 2017. "Diversification and corporate social performance in manufacturing companies," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 7(1), pages 121-139, April.

    More about this item

    Keywords

    Product diversification; performance; firms; Spain;
    All these keywords.

    JEL classification:

    • L10 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - General

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