Asia Pacific Journal of Management

, Volume 22, Issue 1, pp 65–88 | Cite as

International Diversification and Performance: Evidence from Singapore

  • Lin Tongli
  • Er Jwee Ping
  • Winston Kwok Chee Chiu


This study focuses on how international diversification affects a firm in terms of multiple performance measures (accounting-based, market-based, and intangible value creation). The study is unique as it uses segment data made available only recently, which enables the examination of both product and international diversification with performance. The period studied coincided with Singapore firms’ performance during the Asian Financial Crisis. In contrast to previous studies on Singapore, our results show that product diversification is negatively correlated to all measures of performance, while international market diversification is positively correlated. We attribute the difference to the time period which covers both upswings and downturns of the economy, unlike previous studies which considered only the former. Other control measures were incorporated; firm size is highly significant in explaining all measures of performance but not so for firm age, leverage, risk and industry. For top managers, we suggest that regardless of economic climate, the dominant diversification strategy is to take a focused approach to product diversification, but a broad approach to international diversification.


product diversification international diversification firm performance 


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Copyright information

© Springer Science + Business Media, Inc. 2005

Authors and Affiliations

  • Lin Tongli
    • 1
  • Er Jwee Ping
    • 1
  • Winston Kwok Chee Chiu
    • 1
  1. 1.Department of Finance & Accounting, NUS Business SchoolNational University of SingaporeSingapore

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