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The Impact of Corporate Diversification and Financial Structure on Firm Performance: Evidence from South Asian Countries

1
University Institute of Management Sciences, PMAS-Arid Agriculture University Rawalpindi, Punjab 46000, Pakistan
2
COMSATS University Islamabad, Vehari Campus, Islamabad 45550, Pakistan
*
Author to whom correspondence should be addressed.
J. Risk Financial Manag. 2019, 12(1), 49; https://doi.org/10.3390/jrfm12010049
Received: 29 January 2019 / Revised: 20 March 2019 / Accepted: 21 March 2019 / Published: 25 March 2019
(This article belongs to the Collection Trends in Emerging Markets Finance, Institutions and Money)
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Abstract

We examined the impact of corporate diversification and financial structure on the firms’ financial performance. We collected data from 520 manufacturing firms from Pakistan, India, Sri Lanka, and Bangladesh. We used panel data of 14 years from 2004–2017 to analyze the results. We applied a two-step dynamic panel approach to analyze the hypotheses. We found that product diversification and geographic diversification significantly affected the firms’ financial performance. We further found that dividend policy and capital structure had a significant impact on the firm’s financial performance. View Full-Text
Keywords: corporate diversification; financial structure; corporate governance; audit quality; firm financial performance corporate diversification; financial structure; corporate governance; audit quality; firm financial performance
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This is an open access article distributed under the Creative Commons Attribution License which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited (CC BY 4.0).
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Mehmood, R.; Hunjra, A.I.; Chani, M.I. The Impact of Corporate Diversification and Financial Structure on Firm Performance: Evidence from South Asian Countries. J. Risk Financial Manag. 2019, 12, 49.

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