Does the Diversification – Firm Performance Relationship Change Over Time? A Meta-Analytical Review

Schommer, M, Richter, Ansgar and Karna, A (2018) Does the Diversification – Firm Performance Relationship Change Over Time? A Meta-Analytical Review Journal of Management Studies.

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Abstract

We study the relationship between diversification and firm performance in the context of the decline in levels of diversification over time. We argue that the pressure to reduce diversification may have more strongly affected those firms whose diversification strategies were most detrimental to firm performance. We employ meta-analytical regression (MARA) in order to test our hypotheses, using a total of 267 primary studies containing 387 effect sizes based on 150,000 firm-level observations from over 60 years of research on the diversification–firm performance relationship. The findings suggest that levels of unrelated diversification have decreased, whereas levels of related diversification have increased since the mid-1990s, following an initial decrease in the 1970s and 1980s. Furthermore, we find that the relationship between unrelated diversification and firm performance has improved significantly over time, whereas the relationship between related diversification and performance has remained relatively stable.

Item Type:	Article
Divisions :	Faculty of Arts and Social Sciences > Surrey Business School
Authors :	Name Email ORCID Schommer, M Richter, Ansgar a.richter@surrey.ac.uk Karna, A
Date :	16 July 2018
DOI :	10.1111/joms.12393
Copyright Disclaimer :	© 2018 The Authors. This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.
Depositing User :	Melanie Hughes
Date Deposited :	21 Jun 2018 09:31
Last Modified :	10 Jun 2019 14:28
URI:	http://epubs.surrey.ac.uk/id/eprint/847114

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