A comparative study of U. S. and korean firms: Changes in diversification and performance

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