Title: The impact of product diversification and capital structure on firm performance: evidence from Vietnamese manufacturing enterprises
Authors: Ho Phi Dinh; Phuong V. Nguyen; Jamshid C. Hosseini
Addresses: The School of Economics, University of Economics-Ho Chi Minh City, 1A Hoang Dieu Street, Ward 10, Phu Nhuan District, Ho Chi Minh City, Vietnam ' The School of Business, International University, Vietnam National University – HCMC, Quarter 6, Linh Trung Ward, Thu Duc District, Ho Chi Minh City, Vietnam ' College of Business Administration and Graduate School of Management, Marquette University, 1250 W. Wisconsin Avenue, Milwaukee, WI 53233, USA
Abstract: This study examines the influence of product diversification (PD) and capital structure on firm performance in a transitional economy. Ownership structure has been considered as one of the critical factors impacting the efficiency of diversification strategies. However, few studies have investigated the effect of export orientation and ownership structure on PD strategies within the manufacturing sector in emerging markets such as Vietnam. Utilising a dataset on Vietnamese manufacturing enterprises from 2007 to 2015 generated by Vietnam General Statistics Office, the paper investigates the impact of PD on company performance within various capital structure types such as state-owned enterprises, private companies, corporations, and foreign direct investment (FDI) enterprises. We conclude that private companies and corporations are more likely to engage in and reap benefits from PD strategies while other types of enterprises appear to be less likely to engage in PD and, therefore, lag in attaining higher levels of advantage.
Keywords: product diversification; ownership structure; Vietnamese manufacturing firms; emerging economies; state-owned enterprises.
Journal for Global Business Advancement, 2019 Vol.12 No.1, pp.95 - 116
Received: 11 Jun 2018
Accepted: 21 Feb 2019
Published online: 28 May 2019 *