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:: year 15, Issue 57 (2023) ::
fa 2023, 15(57): 51-72 Back to browse issues page
The Effect of Diversification Strategy on the Efficiency Internal Capital Markets of Business Groups with Emphasis on the Moderating Role of Product Market Competition
Faramarz Karami Taleghani1 , Mohammad Reza Vatan parast * 1, Javad Rezazadeh2 , Keyhan Azadi Hir1
1- Department of Accounting, Rasht Branch, Islamic Azad University, Rasht, Iran.
2- Department of Accounting, Tarbiat Modares University, Tehran, Iran.
Abstract:   (2702 Views)
Accounting literature shows that one of the most important motivations for diversification is the creation and access to internal capital markets. Considering the key role of diversification strategy in the strategic behavior of companies, studies in this field show different results. On the one hand, based on theoretical and experimental researches and arguments, the optimal allocation of internal resources has been mentioned as one of the advantages of these markets. On the other hand, increasing agency problems caused by adopting a diversification strategy are considered as one of the reasons for the inefficient allocation of internal resources in this market. However, what should be pointed out is that in many of these studies, the diversification of independent companies has been investigated and to some extent, the function of the internal capital markets of business groups has been ignored in the context of adopting a diversification strategy. Therefore, the aim of this research is to investigate the effect of diversification strategy on the internal capital markets efficiency of business groups in the allocation of internal resources and performance, taking into account the role of moderating the product market competition. In order to achieve the goal of the research, the information of 18 business groups, whose main companies are listed in the Tehran Stock Exchange or OTC were collected during the years 2015 to 2022 and the study hypotheses were tested using multiple regression with panel data. The findings of the research show that the diversification strategy has a negative and significant effect on the internal resource allocation efficiency and internal capital markets performance efficiency of business groups. Also, the findings show that product market competition weakens the relationship of diversification strategy with the internal resource allocation efficiency and internal capital markets performance efficiency of business groups.
Article number: 4
Keywords: Business Groups, Diversification Strategy, Internal Capital Markets Efficiency, Product Market Competition
Full-Text [PDF 696 kb]   (98 Downloads)    
Type of Study: Research | Subject: Special
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Karami Taleghani F, Vatan parast M R, Rezazadeh J, Azadi Hir K. The Effect of Diversification Strategy on the Efficiency Internal Capital Markets of Business Groups with Emphasis on the Moderating Role of Product Market Competition. fa 2023; 15 (57) : 4
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year 15, Issue 57 (2023) Back to browse issues page
فصلنامه حسابداری مالی Quarterly Financial Accounting
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