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Industrial Diversification and Performance in an Emerging Market

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  • Emel Yücel
  • Yıldırım Beyazıt Önal

Abstract

In this study, we investigated the relationship between industrial diversification and firm performance using a market-based performance measure and an accounting measure. We used the data of the firms listed on Borsa Istanbul during the period between 2006 and 2012. The results of the panel data indicate that there is a significant positive relationship between diversification and performance. We found that diversified firms outperformed the single firms. As is compatible with a resource-based approach, it was found that diversified firms tended to use their resources more efficiently compared to single firms. Key words: Industrial diversification, Internal capital market, Agency cost, Return on assets, Tobin’s Q, Turkey.JEL: G30, G34.

Suggested Citation

  • Emel Yücel & Yıldırım Beyazıt Önal, 2016. "Industrial Diversification and Performance in an Emerging Market," Panoeconomicus, Savez ekonomista Vojvodine, Novi Sad, Serbia, vol. 63(4), pages 441-454.
    • Handle: RePEc:voj:journl:v:63:y:2016:i:4:p:441-454:id:35
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    More about this item

    Keywords

    Industrial diversification; Internal capital market; Agency cost; Return on assets; Tobin’s Q; Turkey;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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