Capital structure, free cash flow, diversification and firm performance: A holistic analysis

Park, Kwangmin; Jang, SooCheong

doi:10.1016/j.ijhm.2013.01.007

Cited by 108 publications

(97 citation statements)

References 74 publications

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“…This finding is congruent with some previous studies (Chatterjee and Wernerfelt 1991;Kang 2013;Kim 1989;Palepu 1985;Park 2002;Park and Jang 2013;Su and Tsang 2015). For instance, Kang (2013) notes that there is a significant and positive relationship between unrelated diversification and CSP.…”

Section: Discussionsupporting

confidence: 90%

“…Several prior studies have investigated the relationship between related diversification and company performance (Gary 2005;Miller 2006;Park and Jang 2013;Su and Tsang 2015). For example, Su and Tsang (2015) reveal that product diversification relates to financial performance.…”

Section: Theory and Hypothesesmentioning

confidence: 99%

“…Furthermore, prior studies have argued that unrelated diversification has a link with organizational performance (Chatterjee and Wernerfelt 1991;Kang 2013;Kim 1989;Palepu 1985;Park 2002;Park and Jang 2013;Su and Tsang 2015). For example, Kim et al (1989) found that unrelated diversification strategy might be positively associated with organizational performance when companies are well diversified globally.…”

Section: Theory and Hypothesesmentioning

confidence: 99%

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Diversification and corporate social performance in manufacturing companies

Patrisia

Dastgir

2016

Eurasian Bus Rev

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The effects of diversification on financial performance are well-established, less so the way in which diversification influences company behaviour towards stakeholder demand and social concern. This paper investigates the relationship between business diversification and corporate social performance (CSP) in an industrial setting, in Indonesia. CSP is measured with an index constructed from content and disclosure analysis of annual company reports in line with global reporting initiative standards. A sample of 107 listed manufacturing companies from the Indonesian Stock Exchange is used to estimate a lagged multiple regression model to show that industry-level diversification does not have an effect on CSP. However, distinguishing between related and unrelated diversification produces a different outcome whereby, related diversification is negatively and statistically significantly correlated with CSP. Unrelated diversification, on the other hand, shows a positive and statistically significant relationship. It means the relationship between unrelated diversification and CSP is more positive than the relationship between related diversification and CSP. The findings offer a unique insight into industrial diversification and CSP in Indonesia's expanding manufacturing sector.

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Section: Discussionsupporting

confidence: 90%

Section: Theory and Hypothesesmentioning

confidence: 99%

Section: Theory and Hypothesesmentioning

confidence: 99%

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Diversification and corporate social performance in manufacturing companies

Patrisia

Dastgir

2016

Eurasian Bus Rev

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“…The other variables including leverage, dividend, and book value have no effect on the mentioned variables. This is different form findings of Park (2013) which stated that regarding the above mentioned cases can help analysts to evaluate the firm's efficiency.…”

Section: Resultscontrasting

confidence: 63%

“…Park (2013) examined the relationship between capital structure, free cash flow, stock variety, and performance of different companies; his findings revealed that leverage is an effective way in reducing free cash flow and promoting company's performance. Reducing inappropriate variation in Company's investments from free cash flow may result in enhancing firm performance.…”

Section: Introductionmentioning

confidence: 99%

Investigating the Effects of Stable Profitability and Free Cash Flow on Stock Returns of Companies Listed in Tehran Stock Exchange

Vakilifard¹,

Shahmoradi²

2014

IJARAFMS

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Global diversification, profitability and revenue creation: Evidence from an emerging economy

Subramaniam,

Wasiuzzaman,

Hosen

et al. 2024

Bus Strat Dev

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The aim of this article is to examine the impact of global diversification on firm performance. Data for this study were gathered from a total of 714 firms over a period of 5 years, from 2016 to 2020, totalling 2904 firm‐year observations. The relationship between global diversification and firm performance is analysed using ordinary least square (OLS) and quantile regression (QR) approaches. Based on OLS regression, global diversification negatively influences both the ability to create revenue and generate profits, with significant evidence only for revenue. On the other hand, QR analysis presents various perspectives of the relationship. Although global diversification is still negatively associated with the profitability of under‐performing firms, the relationship can be positive once the firms begin to perform well. In terms of revenue creation, its association with global diversification is found to be significantly negative for all levels of revenue. This demonstrates how global diversification can provide a distinctive platform for firms to generate profits even though their ability to make revenue decreases as their performance improves. Policy implications are discussed accordingly.

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Capital structure, free cash flow, diversification and firm performance: A holistic analysis

Cited by 108 publications

References 74 publications

Diversification and corporate social performance in manufacturing companies

Diversification and corporate social performance in manufacturing companies

Investigating the Effects of Stable Profitability and Free Cash Flow on Stock Returns of Companies Listed in Tehran Stock Exchange

Global diversification, profitability and revenue creation: Evidence from an emerging economy

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