Analysing the relationship between diversification strategy and firm performance: the role of the economic cycle
The relationship between corporate strategies and firm performance has been one of the key debates in the discipline of Strategic Management. There are studies that analyse the moderating role that certain variables may play in that relationship. These variables tend to refer to aspects within the f...
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| Format: | Article |
| Language: | English |
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Universidad del País Vasco (UPV/EHU)
2019-06-01
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| Series: | Management Letters/Cuadernos de Gestión |
| Subjects: | |
| Online Access: | http://www.ehu.eus/cuadernosdegestion/revista/en/published-issues/articulo?year=2019&vol=19&num=2&o=1 |
| _version_ | 1819209639979384832 |
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| author | Esteban López Zapata Fernando Enrique García Muiña Susana María García Moreno |
| author_facet | Esteban López Zapata Fernando Enrique García Muiña Susana María García Moreno |
| author_sort | Esteban López Zapata |
| collection | DOAJ |
| description | The relationship between corporate strategies and firm performance has been one of the key debates in the discipline of Strategic Management. There are studies that analyse the moderating role that certain variables may play in that relationship. These variables tend to refer to aspects within the firm or, at the very least, within the competitive environment in which a firm operates. Nevertheless, the empirical evidence on the part the general environment plays from an economic perspective is much less common, and focuses on large corporations and on periods of economic growth. Accordingly, using a panel of 1,828 Spanish manufacturing firms of different sizes, an analysis is conducted of the differences in Return On Assets (ROA), Growth in Sales (GS) and Labor Productivity (LP) between specialised firms, those with related diversification, and those with unrelated diversification, between 2002 and 2011, in which there was a period of growth alternated with another one of economic recession. Although some superiority is noted of related diversification and specialisation over unrelated diversification, the differences between strategies are less significant in periods of economic recession, and vary according to the dimension of performance considered. These results reveal the need to consider the economic cycle as a contingent factor that affects the impact corporate strategies have on firm performance. |
| first_indexed | 2024-12-23T05:58:29Z |
| format | Article |
| id | doaj.art-d8a07c96cadc4916ac79f4228c2ea6f9 |
| institution | Directory Open Access Journal |
| issn | 1131-6837 1988-2157 |
| language | English |
| last_indexed | 2024-12-23T05:58:29Z |
| publishDate | 2019-06-01 |
| publisher | Universidad del País Vasco (UPV/EHU) |
| record_format | Article |
| series | Management Letters/Cuadernos de Gestión |
| spelling | doaj.art-d8a07c96cadc4916ac79f4228c2ea6f92022-12-21T17:57:44ZengUniversidad del País Vasco (UPV/EHU)Management Letters/Cuadernos de Gestión1131-68371988-21572019-06-01192153210.5295/cdg.170738elAnalysing the relationship between diversification strategy and firm performance: the role of the economic cycleEsteban López Zapata0Fernando Enrique García Muiña1Susana María García Moreno2Departamento de Ciencias Administrativas, Calle 70 No. 52 – 21 Oficina 13-403 C.P.050010, Medellín (Colombia). esteban.lopez@udea.edu.coÁrea de Organización de Empresas, Pº de los Artilleros, s/n, C.P. 28032, Madrid, (España). fernando.muina@ urjc.esÁrea de Organización de Empresas, Pº de los Artilleros, s/n, C.P. 28032, Madrid, (España). susanamaria.garcia@urjc.esThe relationship between corporate strategies and firm performance has been one of the key debates in the discipline of Strategic Management. There are studies that analyse the moderating role that certain variables may play in that relationship. These variables tend to refer to aspects within the firm or, at the very least, within the competitive environment in which a firm operates. Nevertheless, the empirical evidence on the part the general environment plays from an economic perspective is much less common, and focuses on large corporations and on periods of economic growth. Accordingly, using a panel of 1,828 Spanish manufacturing firms of different sizes, an analysis is conducted of the differences in Return On Assets (ROA), Growth in Sales (GS) and Labor Productivity (LP) between specialised firms, those with related diversification, and those with unrelated diversification, between 2002 and 2011, in which there was a period of growth alternated with another one of economic recession. Although some superiority is noted of related diversification and specialisation over unrelated diversification, the differences between strategies are less significant in periods of economic recession, and vary according to the dimension of performance considered. These results reveal the need to consider the economic cycle as a contingent factor that affects the impact corporate strategies have on firm performance.http://www.ehu.eus/cuadernosdegestion/revista/en/published-issues/articulo?year=2019&vol=19&num=2&o=1Corporate strategydiversificationeconomic cycleperformanceEstrategia corporativadiversificaciónciclo económicodesempeño |
| spellingShingle | Esteban López Zapata Fernando Enrique García Muiña Susana María García Moreno Analysing the relationship between diversification strategy and firm performance: the role of the economic cycle Management Letters/Cuadernos de Gestión Corporate strategy diversification economic cycle performance Estrategia corporativa diversificación ciclo económico desempeño |
| title | Analysing the relationship between diversification strategy and firm performance: the role of the economic cycle |
| title_full | Analysing the relationship between diversification strategy and firm performance: the role of the economic cycle |
| title_fullStr | Analysing the relationship between diversification strategy and firm performance: the role of the economic cycle |
| title_full_unstemmed | Analysing the relationship between diversification strategy and firm performance: the role of the economic cycle |
| title_short | Analysing the relationship between diversification strategy and firm performance: the role of the economic cycle |
| title_sort | analysing the relationship between diversification strategy and firm performance the role of the economic cycle |
| topic | Corporate strategy diversification economic cycle performance Estrategia corporativa diversificación ciclo económico desempeño |
| url | http://www.ehu.eus/cuadernosdegestion/revista/en/published-issues/articulo?year=2019&vol=19&num=2&o=1 |
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