Profitability (ROA) |
|
Gyan (2017Gyan, A. K. (2017). Moderating role of productivity on diversified conglomerates and performance: the case of Malaysia. Asia-Pacific Journal of Business Administration, 9(2), 118-133. https://doi.org/10.1108/APJBA-08-2016-0084 https://doi.org/10.1108/APJBA-08-2016-00...
), Chou and Shih (2020Chou, S. C., & Shih, C. J. (2020). Like father, like son? Diversification decision and related performanceof family firm successors - Evidence from Taiwan. The Quarterly Review of Economics and Finance, 75, 209-220. https://doi.org/10.1016/j.qref.2019.04.012 https://doi.org/10.1016/j.qref.2019.04.0...
) and Zheng and Tsai (2019Zheng, C., & Tsai, H. (2019). Diversification and performance in the hotel industry: Do board size and family representation matter? International Journal of Contemporary Hospitality Management, 31(8), 3306-3324. https://doi.org/10.1108/IJCHM-06-2018-0465 https://doi.org/10.1108/IJCHM-06-2018-04...
) |
Operational risk (RIS) |
Standard deviation of ROA across a five-year period |
Grzebieluckas, Marcon and Alberton (2013Grzebieluckas, C., Marconi, R., & Albeton, A. (2013). A estratégia de diversificação e performance: O caso das companhias abertas no Brasil. Revista de Administração Mackenzie, 14(2), 99-126. https://doi.org/10.1590/S1678-69712013000200005 https://doi.org/10.1590/S1678-6971201300...
), Alessandri and Seth (2014Alessandri, T. M., & Seth, A. (2014). The effects of managerial ownership on international and business diversification: Balancing incentives and risks. Strategic Management Journal, 35(13), 2064-2075. https://doi.org/10.1002/smj.2222 https://doi.org/10.1002/smj.2222...
) and Song et al. (2017Song, S., Park, S., & Lee, S. (2017). Impacts of geographic diversification on restaurant firms’ risk: Domestic vs. international diversification. International Journal of Hospitality Management, 61, 107-118. https://doi.org/10.1016/j.ijhm.2016.11.011 https://doi.org/10.1016/j.ijhm.2016.11.0...
) |
Independent variables |
Industrial diversification (DIVIND) |
Dummy: 1 if the company operates in two or more different four-digit NAICS code segments, and 0 otherwise. |
Ahn, Denis and Denis (2006), Gyan et al. (2017Gyan, A. K., Brahmana, R., & Bakri, A. K. (2017). Diversification strategy, efficiency, and firm performance: Insight from emerging market. Research in International Business and Finance, 42, 1103-1114. https://doi.org/10.1016/j.ribaf.2017.07.045 https://doi.org/10.1016/j.ribaf.2017.07....
), Xiao and Xu (2019) |
Industrial diversification (DIVINDQTY) |
Numerical: Number of segments that the company operates. |
Adapted from Ahn, Denis and Denis (2006Ahn, S., Denis, D. J., & Denis, D. K. (2006). Leverage and investment in diversified firms. Journal of Financial Economics, 79(2), 317-337. https://doi.org/10.1016/j.jfineco.2005.03.002 https://doi.org/10.1016/j.jfineco.2005.0...
), Gyan et al. (2017Gyan, A. K., Brahmana, R., & Bakri, A. K. (2017). Diversification strategy, efficiency, and firm performance: Insight from emerging market. Research in International Business and Finance, 42, 1103-1114. https://doi.org/10.1016/j.ribaf.2017.07.045 https://doi.org/10.1016/j.ribaf.2017.07....
), Xiao and Xu (2019Xiao, Z., & Xu, L. (2019). What do mean impacts miss? Distributional effects of corporate diversification. Journal of Econometric, 213(1), 92-120. https://doi.org/10.1016/j.jeconom.2019.04.007 https://doi.org/10.1016/j.jeconom.2019.0...
) |
International diversification (DIVINT) |
Dummy: 1 if the company has more than 10% of its sales with the foreign market, and 0 otherwise. |
Fauver et al. (2004Fauver, L., Houston, J. F., & Naranjo, A. (2004). Cross-country evidence on the value of corporate industrial and international diversification. Journal of Corporate Finance,10(5), 729-752. https://doi.org/10.1016/S0929-1199(03)00027-0 https://doi.org/10.1016/S0929-1199(03)00...
), Lee et al. (2012Lee, K. T., Hooy, C. W., & Hooy, G. K. (2012). The value impact of international and industrial diversifications on public-listed firms in Malaysia. Emerging Markets Review, 13(3), 366-380. https://doi.org/10.1016/j.ememar.2012.06.001 https://doi.org/10.1016/j.ememar.2012.06...
) and Gyan et al. (2017Gyan, A. K., Brahmana, R., & Bakri, A. K. (2017). Diversification strategy, efficiency, and firm performance: Insight from emerging market. Research in International Business and Finance, 42, 1103-1114. https://doi.org/10.1016/j.ribaf.2017.07.045 https://doi.org/10.1016/j.ribaf.2017.07....
) |
International diversification (DIVINTSA) |
Numerical: Percentage of sales with the foreign market. |
Adapted from Fauver et al. (2004Fauver, L., Houston, J. F., & Naranjo, A. (2004). Cross-country evidence on the value of corporate industrial and international diversification. Journal of Corporate Finance,10(5), 729-752. https://doi.org/10.1016/S0929-1199(03)00027-0 https://doi.org/10.1016/S0929-1199(03)00...
), Lee et al. (2012Lee, K. T., Hooy, C. W., & Hooy, G. K. (2012). The value impact of international and industrial diversifications on public-listed firms in Malaysia. Emerging Markets Review, 13(3), 366-380. https://doi.org/10.1016/j.ememar.2012.06.001 https://doi.org/10.1016/j.ememar.2012.06...
) and Gyan et al. (2017Gyan, A. K., Brahmana, R., & Bakri, A. K. (2017). Diversification strategy, efficiency, and firm performance: Insight from emerging market. Research in International Business and Finance, 42, 1103-1114. https://doi.org/10.1016/j.ribaf.2017.07.045 https://doi.org/10.1016/j.ribaf.2017.07....
) |
Industrial and international diversification (DIVINDINT) |
Dummy: 1 if the company has industrial and international diversification, and 0 otherwise. (Moderating variable between DIVIND and DIVINT) |
Lee et al. (2012Lee, K. T., Hooy, C. W., & Hooy, G. K. (2012). The value impact of international and industrial diversifications on public-listed firms in Malaysia. Emerging Markets Review, 13(3), 366-380. https://doi.org/10.1016/j.ememar.2012.06.001 https://doi.org/10.1016/j.ememar.2012.06...
) |
Industrial and international diversification (DIVINDQTY X DIVINTSA) |
Numerical: Moderating variable between DIVINDQTY and DIVINTSA |
Adapted from Lee et al. (2012Lee, K. T., Hooy, C. W., & Hooy, G. K. (2012). The value impact of international and industrial diversifications on public-listed firms in Malaysia. Emerging Markets Review, 13(3), 366-380. https://doi.org/10.1016/j.ememar.2012.06.001 https://doi.org/10.1016/j.ememar.2012.06...
) |
Industrial diversification (DIVIND23) |
Dummy: 1 if the company operates on two or three different four-digit NAICS code segments, 0 otherwise. |
Adapted from Carvalho et al. (2012Carvalho, T. F., Maia, M. V., & Barbedo, C. H. S. (2012). O efeito da diversificação no valor das empresas listadas em bolsa no Brasil. Revista de Administração Mackenzie, 13(1), 87-109. https://doi.org/10.1590/S1678-69712012000100005 https://doi.org/10.1590/S1678-6971201200...
) |
Industrial diversification (DIVIND45) |
Dummy: 1 if the company operates on four or five different four-digit NAICS code segments, and 0 otherwise. |
Industrial diversification (DIVIND5) |
Dummy: 1 if the company operates in more than 5 different four-digit NAICS code segments, and 0 otherwise. |
International diversification (DIVINT1130) |
Dummy: 1 if the company presents from 11 to 30% of its sales with the foreign market, and 0 otherwise. |
International diversification (DIVINT3150) |
Dummy: 1 if the company presents from 11 to 30% of its sales with the foreign market, and 0 otherwise. |
International diversification (DIVINT50) |
Dummy: 1 if the company has more than 50% of its sales with the foreign market, and 0 otherwise. |
Control variables |
Leverage (LEV) |
|
Gyan (2017Gyan, A. K. (2017). Moderating role of productivity on diversified conglomerates and performance: the case of Malaysia. Asia-Pacific Journal of Business Administration, 9(2), 118-133. https://doi.org/10.1108/APJBA-08-2016-0084 https://doi.org/10.1108/APJBA-08-2016-00...
) and Bhatia and Thakur (2018Bhatia, A., & Thakur, A. (2018). Corporate diversification and firm performance: An empirical investigation of causality. International Journal of Organizational Analysis, 26(2), 202-225. https://doi.org/10.1108/IJOA-04-2017-1149 https://doi.org/10.1108/IJOA-04-2017-114...
) |
SIZE |
Natural logarithm of sales revenue |
Delbufalo et al. (2016Delbufalo, E., Poggesi, S., & Borra, S. (2016). Diversification, family involvement and firm performance Empirical evidence from Italian manufacturing firms. Journal of Management Development, 35(5), 663-680. https://doi.org/10.1108/JMD-09-2015-0129 https://doi.org/10.1108/JMD-09-2015-0129...
) and Gyan (2017Gyan, A. K. (2017). Moderating role of productivity on diversified conglomerates and performance: the case of Malaysia. Asia-Pacific Journal of Business Administration, 9(2), 118-133. https://doi.org/10.1108/APJBA-08-2016-0084 https://doi.org/10.1108/APJBA-08-2016-00...
) |
Fixed assets (FA) |
|
Zheng and Tsai (2019Zheng, C., & Tsai, H. (2019). Diversification and performance in the hotel industry: Do board size and family representation matter? International Journal of Contemporary Hospitality Management, 31(8), 3306-3324. https://doi.org/10.1108/IJCHM-06-2018-0465 https://doi.org/10.1108/IJCHM-06-2018-04...
) |