Product Diversification, Corporate Entrepreneurship, and Firm Performance: The Case of Vietnamese Firms
Proceeding of European Association for Research in Industrial Economics (EARIE) Conference, 2010
27 Pages Posted: 9 Sep 2012
Date Written: 2010
Abstract
This paper reexamines the relationship between the firm’s product diversification strategy and its performance. I propose a theoretical framework to indicate that the effect of diversification, as an act of corporate entrepreneurship, depends on whether responsiveness or synergy is emphasized. Empirical evidences from the provincial firm-level database in Vietnam show that diversification has positive and non-linear decreasing impact on firm-level profitability. The estimation results are consistent with different methodological treatments adopted: diversification index measured exogenously or endogenously in static model or dynamic model.
Keywords: product diversification, corporate entrepreneurship, Vietnam, firm performance
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