Which technology diversification index should be selected?: Insights for diversification perspectives

Kim, Keungoui; Hwang, Junseok; Jung, Sungdo; Kim, Eungdo

doi:10.1080/23311975.2019.1643519

Cited by 11 publications

(8 citation statements)

References 49 publications

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“…As the selection of diversification indices influences the result and meaning, the decision should be made using reliable references. Kim et al (2019) proposed the two diversification perspectives for balance-centered diversification (Gini-Simpson) and hetero-centered diversification (Rao-Stirling) to cover the diverse properties. Among these, we use the Rao-Stirling index, 2 because Rao-Stirling has an advantage in observing the difference between elements.…”

Section: Variablesmentioning

confidence: 99%

Related and unrelated product diversification and collaboration strategies: Comparison between the pharmaceutical and biopharmaceutical industries

Kim

Lee

Hwang

et al. 2022

J of Product Innov Manag

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In pharmaceutical and biopharmaceutical industries, developing and commercializing products require great investments and intensive clinical trials. With regard to managing the risk and uncertainty of such product development, especially given the low success rates, product diversification and collaboration strategies can be instrumental for firms. Especially, the differences in product development complexity and market condition among industries require more case-specific implications due to the absence of a universally applicable strategy, even in these two similar industries. To date, little is known or discussed regard- | 561Kim et al.

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Section: Variablesmentioning

confidence: 99%

Related and unrelated product diversification and collaboration strategies: Comparison between the pharmaceutical and biopharmaceutical industries

Kim

Lee

Hwang

et al. 2022

J of Product Innov Manag

Self Cite

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“…In other words, any diversification index can be used in diversification studies but the differences between the points of interest of each property of diversification remain. Instead of selecting a single diversification index, thus, this study categorises diversification into two perspectives adopts Kim et al's (2019) study: balance-centred and hetero-centred. Balance-centred diversification reflects the balance of diversification.…”

Section: Measurement Indices Of Diversificationmentioning

confidence: 99%

“…The result may be biased due to the properties of diversification it focuses on if a certain diversification index is selected for measurement. Firm-level diversification can be measured with two different diversification perspectives by Kim et al’s (2019) study: balance-centred and hetero-centred. Balance-centred diversification reflects the balance of diversification and tells us whether only certain elements are diversified or if the diversification is equally balanced.…”

Section: Introductionmentioning

confidence: 99%

“…By doing so, a firm’s diversification effect can be clarified and separate implications can be derived. Furthermore, firm-level diversification is measured with two different diversification perspectives adopts Kim et al’s (2019) study: balance-centred (Gini-Simpson) and hetero-centred (Rao-Stirling) diversification. With these two diversification models, the understanding of firms’ diversification with respect to the properties of diversity can be enhanced.…”

Section: Introductionmentioning

confidence: 99%

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The Optimal Diversification Strategy in Pharmaceutical Industry: Balance-centred or Hetero-centred?

Kim

Hwang

Jung³

et al. 2021

Science, Technology and Society

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Due to high uncertainty of product development and business environment, firm-level diversification has been regarded as one of the most effective methods in pharmaceutical firms. In previous study, firm-level diversification was discussed by different value chains of market, product, and technology. However, in most cases, the diversification itself was adopted in a simple manner although its property contains different aspects and the results varies depending on the diversity property of selected index. In addition, the existing approach for measuring firm’s product/market diversification using sales information distinguished by standard industry classification cannot provide direct implication as different strategies are made for market and product diversification. Therefore, this study examines the effects of firm-level diversification on business and innovation performances in pharmaceutical firms by considering (1) three diversification types: market, product, and technology, (2) clear separation between market and product diversification, and (3) two diversification perspectives: balance-centred and hetero-centred. For empirical analysis, an integrated firm-level data set combining from Medtrack, Orange Book, Compustat and Total Patent database is used. From the result, in case of market diversification, less market heterogeneity causes significant influence on business performance. For product and technology, a concentrated and greater heterogeneity of product diversification are turned out to promote business performance, while the more intensive and heterogeneous technology diversification has been shown to improve innovation performance.

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“…Therefore, one minus HHI demonstrates the diversification ratio (Kim et al 2019, Rubio-Varas and Munoz-Delgado 2019, and Chikoto et al 2016. HHI varies between 0 and 1 (0 < HHI < 1).…”

Section: Herfindahl Hirschman Index (Hhi)mentioning

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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Which technology diversification index should be selected?: Insights for diversification perspectives

Cited by 11 publications

References 49 publications

Related and unrelated product diversification and collaboration strategies: Comparison between the pharmaceutical and biopharmaceutical industries

Related and unrelated product diversification and collaboration strategies: Comparison between the pharmaceutical and biopharmaceutical industries

The Optimal Diversification Strategy in Pharmaceutical Industry: Balance-centred or Hetero-centred?

The impacts of diversification strategy on the financial performance of insurers

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