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Product Diversity, Human Capital of Board and Block Shareholders, and Firm Performance: Theory and Evidence
Chuang, Chien Hui
Chuang, Chien Hui
Block Shareholders’ Experience
|Issue Date: ||2016-02-03 11:16:05 (UTC+8)|
Diversification has been discussed for a long time. Diversification is a popular strategy for firms to build competitive advantage. However, the empirical results on the relationship between diversification and firm performance are conflict. The purpose of this dissertation is extending the prior theoretical framework and empirical studies to establish a research framework for the influence of diversity on firm performance under an emerging market. In emerging markets, firms implement product diversification easier than other types of diversification. This dissertation focuses on the influence of product diversity on firm performance in emerging markets. Moreover, this study also investigates what moderators affect firms’ ability to reap the benefits while decreasing the cost from complicity and risk of product diversity. Product diversification is one of strategic decisions for firms. The formulation of strategies and decision making is complex and relies on knowledge structure in firms. Thus, human capital of decision makers would be a key factor in the relationship between product diversity and firm performance. The human capital of top managers has been discussed a lot in literature. Top managers have cognitive limitations on strategic decision, so they would like to search advice and information for others. Board of directors and block shareholders play important roles in strategic decision. Therefore, this study discusses the role of human capital of board and block shareholders in the relationship between product diversity and firm performance.
This study uses electronic industry in Taiwan as research samples and empirically tests the research hypotheses. The results provide a more comprehensive view of product diversity and firm performance among an emerging market.
The empirical results support the argument that product diversity is not always positively related to firm performance. Because of the imperfections in capital, products, and managerial talent, the costs of product diversity is higher than benefits in emerging markets. In addition, firms’ human capital is helpful for firms to overcome the uncertainty and risk of product diversity. Board’s industry experience and top management experience bring a short term benefit on firm performance under high product diversity. On the other hand, block shareholders’ industry experience brings benefit on firm performance under high product diversity after a long period.
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|Source URI: ||http://thesis.lib.nccu.edu.tw/record/#G0973535021|
|Data Type: ||thesis|
|Appears in Collections:||[會計學系] 學位論文|
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