Paper Title
Corporate Diversification, Firm Performance and GFC: Evidence from Singapore Economy
Abstract
We examine the factual effects of diversification on firm performance in Singapore. A number of hypotheses have been developed and tested to investigate the impacts of diversification on firm performance with respect to the impact of global financial crisis (GFC). The empirical findings show that diversification creates value for Singaporean firms based on accounting based measures (ROA and ROE). However, the diversification premium cannot be found if market based performance measure (i.e., Tobin’s Q)is employed. While both diversified and single line firms were found to be affected by GFC, single line firms were more severely affected by the crisis. In short, this paper provides new information about the effect of diversification and insights of how business diversification strategy functioned during the GFC period in Singapore economy.
Keywords - Business Diversification, Firm Performance, Global Financial Crisis