Diversification Strategy, Accounting Determined Risk, and Accounting Determined Return.

Bettis, Richard A.; Hall, William K.

doi:10.2307/255989

Cited by 291 publications

(165 citation statements)

References 6 publications

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“…Firm performance has been widely linked to a firm's diversification profile by a variety of studies (Bettis, 1981;Bettis & Hall, 1982;Dess, Gupta, Hennart, & Hill, 1995;Palepu, 1985;Rumelt, 1974). Therefore, it is critical to assess the influence and effects of a firm's diversification profile on performance when proposing a study to explain firm performance.…”

Section: The Diversification-performance Linkagementioning

confidence: 99%

Assessing the Impact of Firm Reputation on Performance: An International Point of View

Hall¹,

Lee²

2014

IBR

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In order to operationalize difficult concepts (corporate reputation, corporate social responsibility, and stakeholder orientation) researchers have generally turned to the Fortune Reputation Index (FRI) as a readily available measure. Despite the heavy reliance on the Fortune Reputation Index as a valid measure of a firm's reputation or social responsibility, the results of a study conducted by Fryxell & Wang (1994) questioned the usefulness of the FRI as it is currently constituted. To be more specific, it has been suggested that the FRI is merely an amalgamation of financial metrics that reflects a firm's overall financial health. In response to such an accusation, more recent research conducted by Lee & Hall (2008) that revalidates the veracity of the FRI. Even after controlling for any financial -halo‖ effects, the validity of the FRI as an acceptable proxy for firm reputation and social responsibility has been reestablished. In an effort to extrapolate on these more recent findings, the present study seeks to investigate corporate reputation from an international context. Results confirm a positive correlation between firm performance and firm reputation and highlight the importance of firm reputation as a critical strategic asset that needs to be managed.

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Section: The Diversification-performance Linkagementioning

confidence: 99%

Assessing the Impact of Firm Reputation on Performance: An International Point of View

Hall¹,

Lee²

2014

IBR

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“…Other authors treat M&A the same way (Gugler et al 2003). 5 Rumelt's typology includes the major categories: dominant business, related constrained, related linked and unrelated (conglomerate) businesses and has been applied in various studies (Baysinger and Hoskisson 1989;Bettis and Hall 1982;Montgomery and Singh 1987). 6 For example, Datta et al (1991) review the literature on diversification and find inconclusive evidence.…”

Section: Literature Review and Research Frameworkmentioning

confidence: 99%

Do Synergies Exist in Related Acquisitions? A Meta-Analysis of Acquisition Studies

2008

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Mergers and acquisitions (M&A) aim to increase the wealth of shareholders of the acquiring company, in particular by creating synergies. It is often assumed that relatedness is a source of synergies. Our study distinguishes between business, cultural, technological, and size relatedness. It discusses the reasons why these different forms of relatedness can lead to an acquisition success and we conduct a meta-analysis of 67 prior M&A studies. Results indicate that positive effects can be expected under specific conditions only and have a limited overall impact on acquisition success. A moderator analysis finds that synergies stemming from relatedness depend on industry-, country-, and investor-characteristics.

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“…Accounting-based measures of performance have been commonly used in strategic management and international business (Grant, 1987;Harr, 1989;Hitt et al, 1997;Vernon, 1971). Variance of these accounting measures has been used as a measure of performance risk (Bettis and Hall, 1982;Bettis and Mahajan, 1985;Jung, 1991). These measures are easily available and they are very informative (Barney, 1997).…”

Section: Methodsmentioning

confidence: 99%

“…Within this research realm a particular focus of inquiry was directed at firm performance risk (Bettis and Hall, 1982;Bettis and Mahajan, 1985;Jung, 1991;Contractor et al, 2003;Qian et al, 2008). International diversification can be defined as a firm's expansion beyond the borders of its home country across different countries and geographical regions.…”

Section: Introductionmentioning

confidence: 99%

Effects of International Diversification and Firm Resources on Firm Performance Risk

Çapar¹,

Chinta²,

Sussan³

2015

JMS

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Researchers in international business and strategic management have long been interested in understanding international diversification as a strategy to manage and control firm performance risk. The general argument in this research stream has been arguing that international diversification or multinationality serves as a portfolio diversification strategy that can reduce firm performance risk. However, a major shortcoming of existing studies has been the failure of incorporating firm resources in examining the relationship between international diversification and firm performance risk. Given the importance of firm resources, this study examines the effect of firm resources on firm performance risk relative to that of international diversification. The present study has tested this alternative hypothesis by examining 258 firms over a 5-year period from 13 industries. Results show that it is not international diversification but firm resources such as marketing assets that have a dominant effect on firm performance risk.

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Diversification Strategy, Accounting Determined Risk, and Accounting Determined Return.

Cited by 291 publications

References 6 publications

Assessing the Impact of Firm Reputation on Performance: An International Point of View

Assessing the Impact of Firm Reputation on Performance: An International Point of View

Do Synergies Exist in Related Acquisitions? A Meta-Analysis of Acquisition Studies

Effects of International Diversification and Firm Resources on Firm Performance Risk

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