Ibrahim, Y M and Kaka, A P (2007) The impact of diversification on the performance of UK construction firms. Journal of Financial Management of Property and Construction, 12(2), pp. 73-86. ISSN 1366-4387
Abstract
Built upon theories from outside the construction management literature, this study assesses the impact of product diversification on the performance of construction firms in the UK. Performance was measured based on financial ratios of management performance while diversification was measured by the specialisation ratio. The research involved the use of financial data of construction firms covering the period 1995-2004. The choice of the period is informed by the economic stability during the period and also, by the fact that diversification is a long-term strategy. The findings indicate that focused firms outperform both moderately and highly diversified firms based on return on total assets (ROTA) and profit margin (PM). However, no performance difference was found between the moderately diversified and highly diversified firms.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | diversification; firm performance; specialisation ratio |
| Index terms: | financial ratio, specialization, stability, strategy, profit, construction firm, diversification, firm performance |
| Subjects: | management, structural engineering, business analysis, market analysis, business, organization, economic analysis |
| Topics: | Business Strategy, Engineering Principles, Research Practice |
| Descriptive scope: | 2 PC |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here