Relationships among industry environment, diversification motivations and corporate performance: An empirical study of the automobile industry in Taiwan
International Journal of Commerce and Management
ISSN: 1056-9219
Article publication date: 31 December 2007
Abstract
Purpose
This paper aims to examine empirically the relationships among industry environment, diversification motivations and corporate performance for a sample of Taiwanese automobile enterprises.
Design/methodology/approach
A 55‐item survey questionnaire was developed to obtain the responses from companies in the automobile industry in Taiwan. Independent sample t‐test and χ2 tests were employed to confirm the homogeneity between the respondents and non‐respondents by firm's characteristics, including by industry, number of employees, and capital.
Findings
The results suggest that industry environment has positive and significant impact on diversification motivations, and has positive but not significant impact on corporate performance. Diversification motivations has positive and significant impact on corporate performance. The results also indicate that firms of higher capital amounts have greater influence on diversification motivations and corporate performance, firms of publicly listed have greater influence on industry environment, diversification motivations and corporate performance and firms of higher degree of diversification have greater influence on diversification motivations only.
Research limitations/implications
Several limitations exist in this study. This study adopts the cross‐sectional research design and examines firms at one point time and because of the constraints of time and data availability, longitudinal research was not viable in this study. Also the amount of variation for some regression models is low.
Originality/value
The paper's results not only provide researchers with a theoretical basis for further research, but also provide top management teams with important data when engaging in diversification.
Keywords
Citation
Tan, B., Chang, H. and Lee, C. (2007), "Relationships among industry environment, diversification motivations and corporate performance: An empirical study of the automobile industry in Taiwan", International Journal of Commerce and Management, Vol. 17 No. 4, pp. 326-346. https://doi.org/10.1108/10569210710844390
Publisher
:Emerald Group Publishing Limited
Copyright © 2007, Emerald Group Publishing Limited