Effects of Diversification Strategies on US Restaurant Firms' Performance. (August 2015)

• Record Type: Journal Article
• Authors: Kang, Kyung Ho; Lee, Seoki
• Is Part Of: Tourism economics. Volume 21:Number 4(2015:Aug.)
• Page Start: 807
• Page End: 831
• Publication Date: 2015-08
• Subjects: diversification strategy -- firm performance -- hospitality industry -- geographical diversification -- brand diversification -- moderating effect; Tourism -- Periodicals; 338.4791
• DOI: 10.5367/te.2014.0374
• Languages: English
• ISSNs: 1354-8166

Abstract

Although diversification strategies in the US restaurant industry are actively implemented with strategic importance, research on the effects of diversification on firm value has been rare. This study investigates the individual effect of geographical diversification and brand diversification on firm value in the US restaurant industry context. Furthermore, to investigate the effects of diversification more comprehensively, this study examines whether or not brand diversification moderates the relationship between geographical diversification and the value of US restaurant firms. The study finds an insignificant effect of geographical diversification on firm performance, a negative effect of brand diversification on performance and a negative moderating effect of brand diversification on the geographical diversification–firm performance relationship.