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The Impact of Corporate Diversification and Financial Structure on Firm Performance: Evidence from South Asian Countries

Author

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  • Rashid Mehmood

    (University Institute of Management Sciences, PMAS-Arid Agriculture University Rawalpindi, Punjab 46000, Pakistan)

  • Ahmed Imran Hunjra

    (University Institute of Management Sciences, PMAS-Arid Agriculture University Rawalpindi, Punjab 46000, Pakistan)

  • Muhammad Irfan Chani

    (COMSATS University Islamabad, Vehari Campus, Islamabad 45550, Pakistan)

Abstract

We examined the impact of corporate diversification and financial structure on the firms’ financial performance. We collected data from 520 manufacturing firms from Pakistan, India, Sri Lanka, and Bangladesh. We used panel data of 14 years from 2004–2017 to analyze the results. We applied a two-step dynamic panel approach to analyze the hypotheses. We found that product diversification and geographic diversification significantly affected the firms’ financial performance. We further found that dividend policy and capital structure had a significant impact on the firm’s financial performance.

Suggested Citation

  • Rashid Mehmood & Ahmed Imran Hunjra & Muhammad Irfan Chani, 2019. "The Impact of Corporate Diversification and Financial Structure on Firm Performance: Evidence from South Asian Countries," JRFM, MDPI, vol. 12(1), pages 1-17, March.
    • Handle: RePEc:gam:jjrfmx:v:12:y:2019:i:1:p:49-:d:216946
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