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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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    Cited by:

    1. Gawlik, Remigiusz, 2009. "Strategic Decision Making in Times of Global Financial Crisis," MPRA Paper 45407, University Library of Munich, Germany.
    2. repec:eee:touman:v:59:y:2017:i:c:p:363-375 is not listed on IDEAS
    3. 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.
    4. 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;

    JEL classification:

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

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