Corporate Diversification, TMT Experience and Performance: Evidence from German SMEs
Management International Review, Vol. 50, No. 1, pp. 35-56
31 Pages Posted: 3 Dec 2008 Last revised: 21 Apr 2014
Date Written: December 2, 2008
We investigate the effect of product diversity and geographic diversity on the performance of SMEs. We propose an inverted U shaped relationship between product (geographic) diversification (PD/GD) and the performance of SMEs. We also propose that PD and GD positively interact with each other to affect the SME performance. Further, we utilized the upper echelons literature to suggest that the effect of corporate diversification on performance is contingent on the TMT experience. Our findings, based on a panel data of 3,692 firm-year observations support our arguments.
Keywords: Product Diversification, Geographic Diversification, Top Management Teams, SMEs, Performance, Germany
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