Faculty Scholarship 1994 - Present

A Comparative Study of US and Korean Firms: Changes in Diversification and Performance

This paper examines the relationship between international diversification and performance by matching a sample of 400 US and 400 Korean firms on industry type and testing the relationship over five years (1992-1996). Results indicate that US firms show a positive association with regard to international diversification and performance, but a negative relationship between product diversification and performance. Korean firms, however, show a positiveassociation with both types of diversification. In addition, Korean firms' strategies were associated more closely with profit-based measures. These results suggest that the two countries do not approach diversification in the same way.