A Conceptual Framework for Evaluating New Business Opportunities for Corporate Diversification

Seifi, Abbas; Moosavi, Seyed Vahid; Ardestani, Ehsan

doi:10.1080/19488289.2012.679765

Cited by 1 publication

(2 citation statements)

References 27 publications

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“…Given the number of risks involved. Seifi et al (2012) pointed out the suitable progression of corporate diversification. These include the identification stage of all investment opportunities followed by an assessment of their market attractiveness.…”

Section: Hypotheses Developmentmentioning

confidence: 99%

“…These include the identification stage of all investment opportunities followed by an assessment of their market attractiveness. In the last step, Seifi et al, (2012) elucidate the need for evaluation of success factors attributed to the new venture adjacent to the investment opportunities, firm competencies, and capabilities. Other than outlined process of corporate diversification, firms utilizing internal as opposed to external financing succeed with their diversification plans (Lins & Servaes, 2002).…”

Section: Hypotheses Developmentmentioning

confidence: 99%

See 1 more Smart Citation

Corporate Diversification and Financial Performance of Listed Firms in Kenya: Does Firm Size Matter?

Tanui

Serebemuom

2021

JAREAS

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Purpose: The study tested the hypothesis about the relationship between corporate diversification and financial performance. Moreover, moderating effect of firm size on the relationship between corporate diversification and financial performance of listed firms at Nairobi securities exchange (NSE) in Kenya was tested. Methodology/Approach/Design: The study was informed by market power and resource-based view (RBV) theories. To test the hypotheses, secondary panel data were collected from 35 listed firms at NSE from 2003 to 2017. Results: From panel regression analysis output, there was a significant positive (β = 2.225, p value = .000 < .05) relationship between corporate diversification and financial performance. Furthermore, firm size had a negative and significant (β = -.155, p value = .031<.05) moderating effect in the relationship between corporate diversification and financial performance. Practical Implications: The study thus concluded that firm size had a buffering effect in the link between corporate diversification and the financial performance of listed firms in Kenya. The findings of the study could be relevant to policymakers in drafting policies that affect diversification strategies of firms. For further research, the study recommended an increase of scope, other measurement approaches, analysis of corporate diversification from different perspectives other than product, and controlling for board characteristics. Originality/Value: The study while controlling the age of the firm tested the moderation effect of firm size in the relationship between corporate diversification and financial performance.

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Section: Hypotheses Developmentmentioning

confidence: 99%

Section: Hypotheses Developmentmentioning

confidence: 99%