International and product diversification

Callaway, Stephen K.

doi:10.1108/10569210810871470

Cited by 6 publications

(1 citation statement)

References 65 publications

(123 reference statements)

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“…Hence, advocators of RBV theory in diversification studies believe that sharing the resources and capabilities among different and new units within a firm can lead to productivity, superior performance and an increase in the firm's value (Wijayanto et al 2019, Clulow et al 2007, Donthu et al 2005. This theoretical perspective has many advocators among diversification strategy researchers in the insurance context (Altuntas et al 2019, Anoke 2019, Oladimeji and Udosen 2019, Kogo and Kimencu 2018, Selma 2014, Berry-Stolzle and Altuntas 2010, Callaway 2008. Similarly, the resource-based view of diversification will be used to justify some of the models and findings of this thesis.…”

Section: The Resource-based View (Rbv) Theorymentioning

confidence: 99%

The impacts of diversification strategy on the financial performance of insurers

Shojaei¹

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The thesis examines the impacts of diversification strategy on the financial performance of firms in the insurance industry. It investigates the impacts of different dimensions of the diversification strategy, including product, geographic, staff, and technological diversification, on insurers' financial performance while considering some essential control variables such as type, size, age, and ownership structure of the companies. The research measures financial performance with the return on equity (ROE) and the return on assets (ROA). The thesis employs the mixed methods research methodology using qualitative and quantitative data collected from Iranian insurance companies, while the data is analysed quantitatively. Two separate studies are conducted to evaluate the impacts of different dimensions of diversification strategy on firms' financial performance. Specifically, the first study focuses on the impact of technological diversification strategy on a firm's financial performance. This study uses the primary data associated with technological diversification through a questionnaire survey with managers from 31 Iranian insurance companies, as the data for technological diversification is not available as secondary data. The data associated with firms' financial performance is collected from reports annually published by the Central Insurance of Iran. Employing the Structural Equation Modelling method enabled by Smart PLS 3 software to analyse the primary data, the study reports mixed effects of technological diversification on the financial performance of Iranian insurers. The second study focuses on investigating the impacts of product, geographic and staff diversification strategies on the financial performance of Iranian insurers. This study employs secondary data collected from the annual reports of the Central Insurance of Iran (from 2011 to 2020). Using econometric techniques for panel data (e.g., fixed effects) enabled by EViews 10 software, the study finds some 3 significant impacts of different dimensions of diversification strategy on the financial performance of Iranian insurers. This thesis is novel in several ways. First, it uses new measurement methods for different dimensions of the diversification strategy, specifically for product diversification and technological diversification. Second, this is the first study in diversification-firms' financial performance literature that combines all four dimensions in a single study. Third, this research benefits from different theoretical perspectives to synthesise the literature and interpret the findings. Therefore, the thesis is not bound or biased to any single theoretical lens. Finally, it provides robust and comprehensive findings for both researchers and practitioners in the insurance industry.

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