Title: Testing critical levels in product and geographic diversification: a structural threshold approach

Authors: Pablo Garrido-Prada; Maria Jesús Delgado-Rodriguez; Desiderio Romero-Jordán

Addresses: Kemmy Business School, University of Limerick, Limerick, Ireland ' Universidad Rey Juan Carlos, Paseo artilleros s/n.28032, Madrid, Spain ' Universidad Rey Juan Carlos, Paseo artilleros s/n.28032, Madrid, Spain

Abstract: This paper performs a structural threshold regression analysis to test the existence of critical diversification levels in a study of the moderating effect of diversification strategies on performance. The method is applied to a novel panel dataset comprising a sample of Spanish multinational companies from non-financial sectors in 2006-2011. The results reveal that a critical level of geographic diversification is needed to influence positively the product diversification-performance relationship. Moreover, the geographic diversification-performance relationship is not influenced by the level of product diversification. Our results are relevant for understanding the complexity of these strategies.

Keywords: geographic diversification; product diversification; firm performance; Spanish firms; structural threshold regression.

DOI: 10.1504/EJIM.2021.117522

European Journal of International Management, 2021 Vol.16 No.3, pp.529 - 554

Received: 30 Aug 2017
Accepted: 08 Nov 2018
Published online: 13 Sep 2021 *

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