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Relationships among industry environment, diversification motivations and corporate performance: An empirical study of the automobile industry in Taiwan

Bertram Tan (College of Business and Management, Kun Shan University, Yung‐Kang City, Taiwan, Republic of China)
Hae‐Ching Chang (Department of Business Administration, National Cheng Kung University, Taiwan, Republic of China)
Chen‐Kuo Lee (Department of Business Administration, National Cheng Kung University, Taiwan, Republic of China Department of Industrial Engineering and Management, Yung Ta Institute of Technology & Commerce, Taiwan, Republic of China)

International Journal of Commerce and Management

ISSN: 1056-9219

Article publication date: 31 December 2007

1939

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

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Emerald Group Publishing Limited

Copyright © 2007, Emerald Group Publishing Limited

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