JOURNAL OF GLOBAL ACCOUNTING

10(3) September, 2024.

ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

CORPORATE DIVERSIFICATION AND VALUE OF QUOTED

CONGLOMERATES IN NIGERIA

Kesther S. Ezeana1 Charles E. Ezeagba2 Chinedu J. Ndubuisi3

1,2&3
Department of Accountancy, Faculty of CITATION: Ezeana, K.S., Ezeagba, C.E. &
Management Sciences, Nnamdi Azikiwe Ndubuisi, C.J. (2024). Corporate
University, Awka, Anambra State, Nigeria.
diversification and value of quoted
1. Email: kscezeana@[Link] conglomerates in Nigeria, Journal of Global
2. Email: [Link]@[Link] Accounting, 10(3), 139 - 163.
3. Email: [Link]@[Link]
Correspondence: kscezeana@[Link] Available:[Link]

Key words: Product Diversification, Regional Diversification, Sector Diversification,

Subsidiary Diversification, Tobin’s Q.

ABSTRACT
The study evaluated the effect of corporate diversification on value of
conglomerate listed companies in Nigeria. The specific objective was to ascertain
the effect of product diversification, subsidiary diversification, regional
diversification and sector diversification on the Tobin’s Q of listed conglomerates
in Nigeria. Ex-post facto research design was adopted in the study. The population
of the study is six (6) listed firms under the Nigerian conglomerate sector.
Purposive sampling was used in selecting the sample size of five (5) conglomerates
that were listed from 2012 to 2023. Secondary data were collected from the annual
reports of the sampled conglomerates for a twelve year period that spanned from
2012 to 2023. The regression model was validated using test of heteroskedasticity,
normality, and multicollinearity. Hypotheses of the study were tested using Robust
Least Square regression analysis to account for the outliers observed in the data.
The findings revealed the following: product diversification has a significant
negative effect on corporate value of listed conglomerates in Nigeria (p-value =
0.0000); subsidiary diversification has a significant positive effect on corporate
value of listed conglomerates in Nigeria (p-value = 0.0000); regional
diversification has a significant positive effect on corporate value of listed
conglomerates in Nigeria (p-value = 0.0000); sector diversification has a
significant negative effect on corporate value of listed conglomerates in Nigeria
(p-value = 0.0072). In conclusion, not all forms of diversification contribute
positively to the value of conglomerates in Nigeria. While subsidiary and regional
diversification strategies appear to enhance corporate value by leveraging
specialized management and geographical expansion, product and sector
diversification may introduce inefficiencies and strategic misalignments that
diminish firm value. The study recommends that to mitigate the negative impact of
product diversification, the Board of Directors and Senior Management should
prioritize core competencies and streamline product lines by discontinuing
underperforming or non-core products and focusing on areas where the
conglomerate has a competitive advantage..

Page | 139 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

1. INTRODUCTION
In Nigeria, conglomerate firms operate across diverse sectors, including manufacturing,
telecommunications, finance, and consumer goods, among others. The rationale behind
conglomerate diversification is multidimensional, influenced by factors such as market
fragmentation, regulatory environments, and the pursuit of economies of scope. Corporate
diversification in Nigerian conglomerates is driven by various strategic objectives. Foremost,
diversification serves as a risk management strategy, allowing firms to spread their operations
across multiple industries and geographic regions to mitigate the impact of sector-specific
challenges or macroeconomic fluctuations (Duho, Duho & Forson, 2023; Osifo & Evbayiro-
Osagie, 2020). Additionally, conglomerates may pursue diversification to capitalize on
emerging market opportunities, leveraging their existing capabilities and networks to enter
new sectors or expand their footprint within existing markets (Adesina, 2021). In today’s
competitive business terrain where firms keep on seeking for business strategies that will
boost their corporate value (Poretti, Weisskopf & de Régie, 2024), corporate diversification
stands as a pivotal concept, shaping the trajectories of firms across industries. Corporate
diversification encapsulates the strategic expansion of a company into various business lines
or industries beyond its core operations (Ajao & Kokumo-Oyakhire, 2021). This strategic
maneuver holds significant implications for firms, shareholders, and the broader economic
landscape.

Understanding the dynamics of corporate diversification and its impact on firm value is
crucial for scholars, practitioners, and policymakers alike as they address the complexities of
modern business environments. Corporate diversification embodies the strategic imperative
of firms to spread their risks and harness opportunities in multiple domains (Binuyo &
Binuyo, 2019). Traditionally, firms have pursued diversification to mitigate the risks
associated with economic downturns, industry-specific challenges, or technological
disruptions. Moreover, diversification enables firms to capitalize on synergies, leverage core
competencies, and explore new revenue streams. This multidimensional approach to growth
often entails venturing into unrelated industries or expanding along the value chain, fostering
resilience and competitiveness in dynamic markets (Clinton & Salami, 2021). The
relationship between corporate diversification and firm value has been a subject of extensive
inquiry within academic literature and corporate boardrooms. Firm value, often measured by
metrics such as stock prices, market capitalization, or profitability, serves as a barometer of a
company's performance and prospects (Poretti, Weisskopf & de Régie, 2024). Understanding
how diversification strategies influence firm value is essential for investors seeking to

Page | 140 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

optimize their portfolios and for managers devising growth strategies. Proponents of
diversification argue that it can enhance firm value by providing opportunities for revenue
growth, risk reduction, and resource sharing (Ehiedu & Priscilla, 2022; Addai, Tang, Gyimah
& Twumasi, 2022; Okpala & Omaliko, 2022; Okoye & Ezenwafor, 2022). By diversifying
across industries or markets, firms can tap into new customer segments, exploit economies of
scale, and mitigate industry-specific risks. Additionally, diversification can enable firms to
capitalize on market cycles, smoothing out fluctuations in performance and enhancing long-
term sustainability (Ajwang, 2021).

Conversely, critics contend that corporate diversification may dilute firm value by dispersing
managerial attention, increasing complexity, and fostering inefficiencies (Riswan & Suyono,
2016; Volkov & Smith, 2015). The pursuit of diversification can lead to organizational inertia,
where resources are allocated suboptimally across diverse business lines. Moreover,
diversification can obscure the core competencies of firms, undermining their competitive
advantage and market positioning. In cases where diversification ventures underperform or
face strategic misalignment, firms may experience value destruction, eroding shareholder
wealth and market confidence (Holtes, 2024). Empirical research on the relationship between
corporate diversification and firm value has yielded mixed findings, reflecting the subtle
nature of this phenomenon (Okpala & Omaliko, 2022; Ehiedu & Priscilla, 2022; Okoye &
Ezenwafor, 2022; Addai, Tang, Gyimah & Twumasi, 2022). Some studies have found positive
correlations between diversification and firm value, particularly in contexts where synergies
are realized, and risk is effectively managed (Suleiman, 2022). For instance, conglomerates
with diverse revenue streams may exhibit resilience during economic downturns, buoying
investor confidence and stock prices. Conversely, other studies such as Okoye and Ezenwafor
(2022); Martiningtiyas, Muchtar, Ristiqomah and Rahman (2022); Quyen, Ha, Darsono and
Minh (2021) have highlighted instances where diversification strategies fail to generate value
or even lead to value destruction. Poorly executed diversification initiatives, characterized by
inadequate due diligence, integration challenges, or misaligned incentives, can undermine
firm performance and erode shareholder returns.

The mechanisms through which corporate diversification affects firm value are manifold and
contingent on various factors. One mechanism is the impact of diversification on risk
management (Haug, Pidun & zu Knyphausen-Aufseß, 2018). By diversifying across
industries or markets with low correlation, firms can reduce the volatility of their cash flows
and enhance their risk-adjusted returns. This risk reduction effect may appeal to risk-averse

Page | 141 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

investors, bolstering firm valuations and stock prices (Krivokapić, Njegomir & Stojić, 2017).
Another mechanism is the exploitation of synergies and economies of scope. Through
diversification, firms can leverage shared resources, capabilities, and knowledge across
business units, driving operational efficiencies and cost savings (Mehmood, Hunjra & Chani,
2019). Synergies may arise from cross-selling opportunities, shared distribution channels, or
pooled R&D efforts, amplifying the overall value proposition of the firm.
Furthermore, corporate diversification can influence firm value through its impact on
managerial decision-making and organizational culture. Diversification initiatives may shape
the strategic priorities, incentive structures, and communication channels within firms,
impacting their ability to innovate, adapt, and execute effectively (Enrichest, 2023). Effective
diversification strategies align managerial incentives with long-term value creation, fostering
a culture of accountability, agility, and innovation. Therefore, corporate diversification
represents a strategic imperative for firms seeking to address the complexities of modern
markets and enhance their competitive resilience. It is against this background that this study
examines the effect of corporate diversification on the firm value of listed conglomerate firms
in Nigeria.

Corporate diversification is supposed to serve as a strategic tool to enhance firm value,

fostering growth, resilience, and long-term sustainability (Githaiga, 2022). Companies
strategically expand into new markets or industries, leveraging synergies, and spreading risks
to optimize shareholder wealth. In this ideal situation, diversification initiatives are
meticulously planned, aligned with core competencies, and executed with precision, resulting
in value accretion for all stakeholders involved (Enrichest, 2023). However, embarking on
diversification strategies without fully assessing the potential risks, synergies, or strategic fit
with the firm’s existing business portfolio results in loss of the benefits of diversification
(Mindtools, 2024). This is often the case when diversification decisions are driven by short-
term market pressures, managerial hubris, or a lack of understanding of the complexities
inherent in managing diverse business lines (Enrichest, 2023) especially with respect to the
diverse economic domain of Nigeria. As a result, firms may find themselves stretched thin,
grappling with operational inefficiencies, and struggling to realize the anticipated benefits of
diversification (Mindtools, 2024). Consequently, inadequately planned diversification efforts
can lead to value destruction, eroding shareholder confidence and diminishing long-term
competitiveness (Ahuja & Novelli, 2017). When diversification ventures underperform or fail
to generate synergies, firms may experience financial distress, shareholder activism, or even
hostile takeovers. Moreover, the diversion of managerial attention and resources towards non-

Page | 142 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

core activities can impede innovation, hinder strategic agility, and weaken the overall
resilience of the firm. Furthermore, the misalignment between diversification strategies and
firm capabilities can exacerbate agency conflicts, exacerbating tensions between management
and shareholders. Managers may pursue diversification initiatives to pursue personal agendas
or empire-building aspirations, rather than maximizing shareholder value. This misalignment
of interests can erode trust in corporate leadership, undermine governance structures, and
impede effective decision-making processes. The existing empirical research on corporate
diversification and firm performance has primarily focused on quoted companies, with limited
attention given to developing countries. Notably, there is a dearth of studies examining the
impact of corporate diversification on the value of listed firms in the conglomerate sector of
the Nigerian Exchange Group. Previous studies, such as those conducted by Suleiman (2022),
Phan, Nguyen, and Hoang (2022), Ehiedu and Priscilla (2022), Suleiman (2022); Phan,
Nguyen and Hoang (2022); Ehiedu and Priscilla (2022); Addai, Tang, Gyimah and Twumasi
(2022); Okpala and Omaliko (2022); Okoye and Ezenwafor (2022); Lahouel, Taleb, Kočišová
and Zaied (2022); Martiningtiyas, Muchtar, Ristiqomah and Rahman (2022); Githaiga (2022);
and others, have explored various aspects of corporate diversification individually. However,
comprehensive examinations of the combined effects of regional and sectoral diversification
strategies are lacking in the context of Nigerian conglomerates firms.

1.1 Objectives
The main objective of the study is to evaluate the effect of corporate diversification on value
of conglomerate listed companies in Nigeria. The specific objectives include to:
1. evaluate the effect of product diversification on corporate value of listed conglomerates
in Nigeria.
2. ascertain the effect of subsidiary diversification on corporate value of listed
conglomerates in Nigeria.
3. investigate the extent of effect that regional diversification has on corporate value among
listed conglomerates in Nigeria.
4. ascertain the extent to which Sector diversification affects corporate value of listed
conglomerates in Nigeria.

Page | 143 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

1.2 Hypotheses
The following are the null hypotheses formulated for the study:
H01. Product diversification has no significant effect on corporate value of listed
conglomerates in Nigeria.
H02. Subsidiary diversification has no significant effect on corporate value of listed
conglomerates in Nigeria.
H03. Regional diversification has no significant effect on corporate value of listed
conglomerates in Nigeria.
H04. Sector diversification has no significant effect on corporate value of listed
conglomerates in Nigeria.

2. LITERATURE REVIEW
2.1 Conceptual Review
2.1.1 Product Diversification and Firm value
Product diversification can be a useful strategy when the firm is more interested in
consolidating their positions within the sector and when there is an arsenal of underutilized
resources that can be used in the production of other products at a low opportunity cost
(Krivokapić, Njegomir & Stojić, 2017). This diversification strategy enhances the efficient
utilization of business resources across multiple products. The underperformance of such
resources in the production process can lead to lose in relative term for the firm, it is however,
economically profitable for the firm to extend their use to other business line or product.
Product diversification strategy was believed to be a strong catalyst for competitiveness in
any industry (Haug, Pidun & zu Knyphausen-Aufseß, 2018). There are several advantages
that could accrue to the firm from product diversification. The theory of a firm holds that a
firm is a bundle of resources that can be used in the production of several separate goods.
However, some firm’s resources cannot be utilized in the production of several goods as they
are product-specific/customized. Other resources may be used in the production of multiple
goods or services in many areas of business. Most firm uses multiple products as a
competitive, risk mitigation and revenue generation strategy. As firm with multiple products
offer to wide classes of customer options to enhance their loyalty. As the life cycle of a given
product enters the decline stage, the revenue from other product could be used to caution the
effect of the short in the revenue from that product. This strategy would enable the firm
maintain balance in their revenue generation, profitability, and dividend payment. Also, it
could be a cost efficiency strategy as the advert time in social media and mass media could

Page | 144 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

be used to show case multiple products. If the cost is spread among all the products could
lower the unit cost of the advert per product showcase and the overall cost per each product.
Hence improving the profit from each product and the overall profit of the organisation. This
has made it is economically profitable for the firm to extend their use to other business lines
or products.

Most firms diversify their products to gain and exploit economies of scope in various
resources (Mehmood, Hunjra & Chani, 2019). Firms that are into product diversification are
faced with the trade-off between the risks of going beyond their reasonable capacity to
effectively offer diverse products and the possible demand externalities generated by offering
a broad range of products. This indicates that as the degree of product diversification within
a certain sector increase, the probability of requiring new managerial skills and the alignment
of activities that are core to the business of a firm also increases. Product diversification
positively affects firms, with additional demands created by providing assortments of
products that maintain more options and reduce customers’ shopping costs (Nwakoby &
Ihediwa, 2018). However, the study observed that the degree of product concentration varies
and can negatively affect profitability due to missed demand externalities, although product
concentration can positively affect the capability to offer high-value products. Product
diversification can enhance firm performance by creating synergy through internalization of
business activities and facilitate demand interaction.

2.1.2 Subsidiary Diversification and Firm value

Corporate diversification is facilitated by the existence of an internal capital market within a
business group. The internal capital markets can make a pool of financial resources available
for subsidiary firms' access on relatively favorable terms. Corporate diversification across
sector, industry or business line by conglomerate firms are often risk reduction measures
against government policies, market and customer preference, economic vagaries (Clinton, &
Salami 2021). Diversified conglomerates can facilitate obtaining critical business assets for
member firms, such as licenses, important technologies, inputs for personnel training, and
bases for distribution networks. These assets enable subsidiary firms to develop and maintain
entrepreneurial capabilities and diversify into different industries. By utilizing the diverse
resources available, companies under a group can achieve better and quicker product
customization and effective relationships with buyers in new markets that subsequently lead
to higher performance. Unrelated subsidiary firms achieve financial economies through risk
reduction, portfolio management, and internal capital markets. Subsidiary diversification is

Page | 145 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

usually done as a strategy for spreading risk, entering a new sector or market, and gaining
control of supplies (Suleiman, 2022). It comes with its own costs and benefits. Diversification
can be categorised into concentric, horizontal, and vertical. Horizontal or unrelated subsidiary
diversification involves the adoption of unrelated subsidiary business operations (Dhir &
Dhir, 2015). Subsidiary diversification has long been regarded as a strategic tool for
organizations to sustain growth and profitability (Osifo & Obainoke, 2021). Subsidiary
activities may be related to those of the parent or not. The strategy of subsidiary diversification
into unrelated subsidiary areas is an important component of strategic management; however,
the relationship between subsidiary diversification strategy and how they impact on the value
of conglomerate firms has been an issue of considerable interest in this research. Companies
whose products are facing threats resulting from environmental uncertainty (political,
economic, social, technological, and legal) can engage in unrelated subsidiary diversification.
Diversification can lead to a firm’s growth, better firm value, and enhance its capability to
explore new markets. When a company operates having profitable and growth-related
opportunities, diversification is an attractive strategy.

2.1.3 Regional Diversification and Firm value

The quest to expand, spread risk, and gain advantage from input and new market has been
identified as the main factor that drives companies to diversify into new regional markets.
Grant (2019) believes that a company’s diversification into another region is to take advantage
of a new market and increase profit; hence, they outperform those that did not diversify into
other regional firms. Kim, Hwang, and Burgers, (2019) aligning with the position of Grant
opined that international companies have greater opportunities to gain access to input, enter
new markets, spread risks, and take advantage of tax havens than other non-diversified
companies (Kim, Hwang, & Burgers, 2019). Despite those benefits, there are costs associated
with internalization that, if not properly managed, can outweigh the benefits. The cost of
internationalization ranges from the cost of managing different business and societal cultures
(managerial constraints), new competition (coordination costs), and complex environmental
factors like political or legal regulations. Beside the cost of internationalization, most
international firm disclose more information than non-international firm. The international
firm operating in difference reporting jurisdiction discloses information to meet the needs of
various stakeholders in the different jurisdiction. Diversification which enhances the wide
reach of firms, and its products / service increases the revenue and spread risk (Okpala &
Omaliko, 2022).

Page | 146 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

Internationalization of operation and market enables the firm benefit from benefit from
economic f scale, and shift tax responsibility with the aim of improving the profitability and
shareholders value. Though one of the main problems associated with internationalization
negatively affect the effective utilization of assets in the company. For instance, the problem
of coordination costs can increase the overall cost and reduce profitability while some
resources may be overutilized and others may be underutilized. Costs associated with
companies increasing their presence in many regions lead to liabilities of newness and
coordination costs. In line with this, the study by Hitt (2014) noted that increasing geographic
dispersion can increase transaction costs significantly. The regional spread can also increase
the coordination pressure and cost on management, which, if not effectively managed, can
affect the financial performance and investor perception of the company’s performance.

Regional diversification gives companies the opportunity to take advantage of economies of

scale and scope, spread risk, increase market share etc. However, these benefits also come
with associated transaction and coordination costs, which can negatively impact the
company’s performance. Kogut and Singh, (2018) empirically finds that these benefits do
arise at the early stage of regional diversification but diminish gradually due to transaction
and coordination costs. The finding from their study suggested that regional diversification is
negatively associated with firm performance. Some companies diversifying into new regions
may incur additional costs due to cultural differences, which may increase the difficulties in
transferring the anticipated competitive advantages into benefits for the company (Kogut &
Singh, 2018).

2.1.4 Sector Diversification and Firm value

Corporate diversification can be facilitated by the existence of an internal capital market
within a business group. The internal capital markets can make a pool of financial resources
available for the subsidiary firm’s access on relatively favourable terms. Diversification
endeavours of conglomerates firms are often risk reduction measures in their product markets,
such firm’s uses resources and capabilities at their disposal to penetrate and become
successful in new product-markets. One of the major advantages of sector diversification is
that it allows firms to maximize value by enhancing their ability to leverage economies of
scale and the scope of markets and industries (Ifurueze & Odesa 2019). The resource-based
view of the firm believes that conglomerate firms, due to their size, can have access to a pool
of resources (technical, organizational, managerial, operational, and financial) that can enable

Page | 147 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

them to compete favorably in the market. However, the diverse nature of conglomerate firms
can be a disadvantage for them if not properly managed as the failure in one subsidiary can
affect the viability of the firm. Examining this from a political perspective, the diversified
group structure of conglomerate firms can be counterproductive as it can result in fewer firms
in the group receiving favorable treatment than others. From an economic standpoint,
conglomerate diversity can increase the cost of management, coordination, and inefficient
resource allocation. Inefficient resource allocation may lead to underutilization of resources
in some segments. Although the diversity nature of conglomerates can act as a resource pool
of explicit and tacit knowledge, the transfer of such knowledge across segments in different
sectors can be difficult owing to differences in top manager backgrounds and operating
experiences.

Amihud and Lev cited in Ifurueze and Odesa (2019) observed that sector and industrial
diversification enhances managers’ abilities to spread risks; hence, they tend to perform better
and have high value than those that do not. Industrial diversification can undermine the
financial positioning of the company’s shareholders and could lead to inefficient resource
allocation between different departments within companies. Most managers, driven by the
desire for power, can excessively diversify their companies into different sectors; such
diversification can result in the distortion of resource allocation and utilization in the
company’s internal capital market. This makes most industrially diversified companies less
sensitive to investment opportunities than specialized companies (Berger & Ofek, 2015). The
type of diversification strategy adopted by the firm will determine the cost and benefit
associated with the diversification. Firms that pursue a sector-related diversification strategy
can achieve economic benefits by increasing the intensity of coordination and communication
among the different business lines. This strategy has the potential to lower the cost of
coordination and information sharing. Although intra-industrial diversification can lead to
higher corporate performance when compared to inter-industrial diversification. The
realization of economic benefits from intra-industrial diversification is highly dependent on
increased coordination and information processing across related businesses. Thus, the ability
of a firm to share special technologies, production skills, sector knowledge, distribution
channels, resource inputs, research facilities, and competencies of one business is easily
transferable and usable by another.

Somnath and Saptarshi (2015), using the quoted conglomerates and manufacturing companies
in India between 2008 and 2014, evaluate the relationship that exists between sector

Page | 148 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

diversification and firm performance. The result indicates that a strong positive relationship
exists between corporate diversification and firm performance, but the level is higher in
conglomerate companies than in manufacturing companies. The study also finds that the
influence of conglomerate size and diversity on performance varies significantly, depending
on whether the companies belong to the manufacturing sector or not. In a related study by
Sunji and Ogollah (2015), using survey design and stratified random sampling techniques,
they selected the sampled companies under the Sameer Group in Kenya finds that industrial
diversification has an impact on the level of performance of companies under the Sameer
group in Kenya.

3. MATERIAL AND METHOD

This study adopted the ex post facto and longitudinal design because we determined the cause-
and-effect relationship between the dependent and the independent variable using the data
that already existed and made no attempt to change it nature and values. The data was
longitudinal in nature as it has both cross sectional and time series characteristics. The
population of the study comprises all the six (6) conglomerate firms listed on the Nigerian
exchange group as at 31st December, 2023. A total of five (5) firms for the study, out of a
population of six (6) listed conglomerate firms in Nigeria were selected as the sample size.
The purposive sampling technique was utilized, to enable the selection of firms that have been
listed from 2012 till 2023. This sampling method was chosen because it allowed the researcher
to focus on firms that had consistent data for the entire period of the study. The chosen firms
are: Chellarams, John Holt, SCOA Nigeria, Trans-nationwide express and UACN Plc. The
study used data collected from the annual financial report of those firms. The data sourced
from annual report covered the period of ten years between 2012 and 2023. The data
generated for this research work were summarily analyzed using descriptive statistical tools.
This descriptive analysis allowed for a comprehensive understanding of the central tendencies
and distribution of the variables. Model diagnostics were conducted by to ascertain the
condition of the model with respect to heteroskedasticity, multicollinearity and normality. The
Jarque-Bera test indicated that the presence of outliers in the distribution of the regression
errors. Thus, there was need to use a regression tool that is less sensitive to departures from
normality during the hypotheses testing. The study therefore implemented robust least square
regression analysis as it was necessary to correct the abnormality in the outliers observed in
the regression model.

Page | 149 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

Table 1. Measurement of Variables

S/N Type Variable Proxies Measured as
1 Independent Corporate Product Number of product lines
Diversification Diversification produced and sold by the
firm. This measure is in
line with the measure
used in the Odesa and
Ifureze (2019)
2 Subsidiary Subsidiary
Diversification diversification as
subsidiary sales to total
sales. Inspirations were
drawn from prior studies
of Odesa and Ifureze
(2019)
3 Regional Number of geographical
Diversification settings that contributed
to firm’s revenue
This is in line with the
study by Ndungu and
Muturi (2019)
4 Sector; The number of sectors
Diversification that the firm is operating
in line with the study of
Li and Sun (2015).
6 Dependent Firm Value TOBINQ Tobin q is measured as
ratio of market value to
book value of the
company share.
Inspirations were drawn
from prior studies like
Saleh (2018).
Source: Researchers’ Compilation.

The model was adopted from the work of Takiah, Rin and Zuraidah (2012) which is; ROA =
(PRODIV, MULTDIV, REGDIV). The model was modified to suit the variables to be used.
The model assumes that the dependent variable is a linear function of the independent
variables with consideration to be heterogeneity in the pooled companies. The model can be
expressed as follows:

TOBINQ = f(PRODIV, SUBDIV, REGDIV, SECDIV) ……………………….….. Eqn 1

This can be econometrically express as
TOBINQit = C0 + C1PRODIVit + C2SUBDIVit + C3REGDIVit + C4SECDIVit + εit ……Eqn
2
Equation 1 is the linear regression model that was used in testing the null hypotheses.

Page | 150 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

Where:
TOBINQ = Corporate value (market value);
PRODIV = Product Diversification;
SUBDIV = Subsidiary Diversification;
REGDIV = Regional Diversification;
SECDIV =Sector Diversification;
C0 = Constant;
C1, … C4, = is the coefficient of the regression equation.
e = Error term;
I = is the cross section of firms used;
t = is years.

The above model would be used to examining the best combination of diversification strategy
that best drive corporate value among listed conglomerate companies in Nigeria. This
provides a basis for the understanding the reason while firm chose more than one
diversification strategy.

4. RESULT AND DISCUSSIONS

4.1 Data Analysis
Table 2. Descriptive Analysis
TOBINQ PRODIV SUBDIV REGDIV SECDIV
Mean 13.15370 7.000000 0.470083 2.100000 3.766667
Median 5.860000 6.000000 0.342468 2.000000 4.000000
Maximum 134.0000 16.00000 1.000000 7.000000 6.000000
Minimum 0.800000 4.000000 0.000000 1.000000 2.000000
Std. Dev. 22.69556 4.194427 0.432969 1.643683 1.306654
Skewness 3.558846 1.548161 0.167810 1.917243 0.208973
Kurtosis 16.71681 3.749206 1.210155 5.665494 1.918005
Jarque-Bera 597.0308 25.37129 8.290462 54.52035 3.363480
Probability 0.000000 0.000003 0.015840 0.000000 0.186050
Sum 789.2219 420.0000 28.20500 126.0000 226.0000
Sum Sq. Dev. 30390.22 1038.000 11.06028 159.4000 100.7333
Observations 60 60 60 60 60
Source: Eviews 10 (2024) Output

Page | 151 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

Table 2 above shows that the average Tobin's Q value is 13.15370, indicating that on average,
the market values the listed conglomerate companies in Nigeria at more than thirteen times
their book value. This is a high mean, suggesting substantial investor confidence or growth
expectations. The maximum value of 134.0000 shows significant outliers or extremely high
valuations for certain companies, while the minimum value of 0.800000 indicates some
companies are valued below their book value. The standard deviation of 22.69556 reflects
high variability in Tobin's Q among these companies. The skewness of 3.558846 suggests a
right-skewed distribution, with more firms having Tobin's Q values above the mean. The
kurtosis of 16.71681, well above 3, indicates a leptokurtic distribution, meaning there are
more extreme values (outliers) than in a normal distribution. The Jarque-Bera probability of
0.000000 confirms that the distribution is not normal.

As per Product Diversification (PRODIV), the mean number of product lines produced and
sold by the firms is 7, suggesting moderate product diversification on average. The maximum
number of product lines is 16, showing that some firms have a broad range of products, while
the minimum number of product lines is 4. The standard deviation of 4.194427 indicates some
variation in product diversification among the firms. The skewness of 1.548161 shows that
the distribution is right-skewed, meaning there are more firms with a number of product lines
above the average. The kurtosis of 3.749206 indicates a distribution with heavier tails than a
normal distribution. The Jarque-Bera probability of 0.000003 suggests the data is not
normally distributed.

In terms of Subsidiary Diversification (SUBDIV), subsidiary diversification, measured as the

ratio of subsidiary sales to total sales, has a mean of 0.470083, indicating that subsidiaries
contribute nearly half of the total sales on average. The maximum value is 1.000000, showing
that in some cases, subsidiaries account for all the sales, while the minimum value is
0.000000, indicating no subsidiary contribution in some firms. The standard deviation is
0.432969, highlighting considerable variation among firms. The skewness of 0.167810
suggests a distribution slightly right-skewed. The kurtosis of 1.210155 is below 3, indicating
a platykurtic distribution with fewer outliers than a normal distribution. The Jarque-Bera
probability of 0.015840 indicates a slight deviation from normality.

Furthermore, Regional Diversification (REGDIV) shows the mean number of geographical

settings contributing to the firm's revenue is 2.100000, showing that on average, firms have
revenues coming from just over two regions. The maximum number is 7, and the minimum
is 1, indicating some firms operate in multiple regions while others are confined to one. The

Page | 152 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

standard deviation of 1.643683 shows moderate variability. The skewness of 1.917243

indicates a right-skewed distribution with more firms having regional operations above the
average. The kurtosis of 5.665494 suggests a leptokurtic distribution with more extreme
values. The Jarque-Bera probability of 0.000000 shows that the distribution significantly
deviates from normality.

Finally, Sector Diversification (SECDIV): shows that the mean number of sectors the firms
are operating in is 3.766667, suggesting that firms typically operate in nearly four different
sectors. The maximum value of 6 and a minimum of 2 indicate the range of sector
involvement. The standard deviation of 1.306654 shows some variability in sector
diversification among the firms. The skewness of 0.208973 suggests a slight right skew, while
the kurtosis of 1.918005 indicates a platykurtic distribution, implying fewer outliers. The
Jarque-Bera probability of 0.186050 indicates that the data is approximately normally
distributed.

4.1.2 Heteroskedasticity
The Breusch-Pagan-Godfrey heteroskedasticity test results, shown in Table 4.2 below,
include an F-statistic of 1.009867 and a corresponding probability value (Prob. F(4,55)) of
0.4104. This probability value is substantially higher than the significance levels of 0.05,
indicating that there is no significant evidence of heteroskedasticity in the regression model.
In other words, the variance of the error terms is constant across observations, satisfying one
of the key assumptions of ordinary least squares (OLS) regression, and suggesting that the
model's estimations are reliable and efficient.

Table 3. Heteroskedasticity Test: Breusch-Pagan-Godfrey

F-statistic 1.009867 Prob. F(4,55) 0.4104

Obs*R-squared 4.105189 Prob. Chi-Square(4) 0.3920
Scaled explained SS 26.14921 Prob. Chi-Square(4) 0.0000

Source: Eviews 10 (2024) Output

4.1.3 Multicollinearity
Multicollinearity occurs when two or more predictor variables in a regression model are
highly correlated, meaning that one can be linearly predicted from the others with a substantial
degree of accuracy. This can make it difficult to determine the individual effect of each

Page | 153 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

predictor on the dependent variable. The table below presents the Variance Inflation Factors
(VIF) for the predictor variables in the model. VIF is a measure of the amount of
multicollinearity in a set of multiple regression variables. A VIF value greater than 10
generally indicates high multicollinearity.

As shown in Table 4, the VIF for PRODIV is 1.812457, indicating a low level of
multicollinearity and suggesting that PRODIV is not highly correlated with the other predictor
variables. SUBDIV has a VIF of 2.267393, which also indicates a low level of
multicollinearity. The VIF for REGDIV is 3.663672, showing moderate multicollinearity, but
still within an acceptable range. Similarly, SECDIV has a VIF of 3.745955, indicating
moderate multicollinearity. In summary, none of the variables have VIF values that suggest
severe multicollinearity. While REGDIV and SECDIV have higher VIF values compared to
PRODIV and SUBDIV, they are still within an acceptable range. Therefore, multicollinearity
does not appear to be a significant issue in this model based on the VIF values presented.

Table 4 Variance Inflation Factors

Date: 06/05/24 Time: 03:36
Sample: 1 60
Included observations: 60

Coefficient Uncentered Centered

Variable Variance VIF VIF

PRODIV 0.817711 6.946005 1.812457

SUBDIV 96.00414 4.985469 2.267393
REGDIV 10.76360 9.745274 3.663672
SECDIV 17.41481 35.40188 3.745955
C 151.9019 19.46189 NA

Source: Eviews 10 (2024) Output

4.1.4 Test of Normality

When assessing the normality of residuals in a regression model, one commonly used test is
the Jarque-Bera test. This statistical test examines whether the sample data have the skewness
and kurtosis matching a normal distribution. The null hypothesis for the Jarque-Bera test is
that the data are normally distributed.

Page | 154 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

The Jarque-Bera test results in a probability value, or p-value, which helps determine whether
to reject the null hypothesis. As shown in Figure 4.1, the Jarque-Bera probability is reported
as 0.000. The p-value of 0.000 is effectively less than 0.05 significance level. In statistical
hypothesis testing, a p-value less than the chosen significance level leads to the rejection of
the null hypothesis. Given the p-value is 0.000, we reject the null hypothesis that the residuals
are normally distributed. This indicates that there is a statistically significant deviation from
normality in the residuals.

Ordinary least squares (OLS) regression assumes that the residuals (errors) are normally
distributed. This assumption is important for making valid inferences about the population
from the sample data. Non-normal residuals can lead to inaccurate confidence intervals and
hypothesis tests, potentially resulting in incorrect conclusions about the relationships between
variables. Since normality is violated, Robust Least Square Regression which is less sensitive
to departures from normality was implemented in hypotheses testing.
20
Series: Residuals
Sample 1 60
16 Observations 60

Mean -2.02e-15
12 Median -1.217040
Maximum 111.4226
Minimum -19.05592
8
Std. Dev. 20.89393
Skewness 3.249387
4 Kurtosis 16.16116

Jarque-Bera 538.6257
0 Probability 0.000000
-20 0 20 40 60 80 100

Figure 1 Normality Testing

Source: Eviews 10 (2024) Output

Page | 155 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

4.2 Test of Hypotheses

Table 5 Robust Least Squares
Dependent Variable: TOBINQ
Method: Robust Least Squares
Date: 06/05/24 Time: 03:34
Sample: 1 60
Included observations: 60
Method: M-estimation
M settings: weight=Bisquare, tuning=4.685, scale=MAD (median centered)
Huber Type I Standard Errors & Covariance

Variable Coefficient Std. Error z-Statistic Prob.

PRODIV -0.476151 0.074855 -6.361009 0.0000

SUBDIV 3.146852 0.811080 3.879831 0.0001
REGDIV 1.034557 0.271580 3.809405 0.0001
SECDIV -0.928505 0.345444 -2.687857 0.0072
C 7.813846 1.020235 7.658870 0.0000

Robust Statistics

R-squared 0.355738 Adjusted R-squared 0.308882

Rw-squared 0.788160 Adjust Rw-squared 0.788160
Akaike info criterion 130.8145 Schwarz criterion 145.9936
Deviance 416.5283 Scale 1.821640
Rn-squared statistic 115.2216 Prob(Rn-squared stat.) 0.000000

Source: Eviews 10 (2024) Output

Table 5 presents key robust statistics from the regression analysis evaluating the effect of
various forms of diversification on the Tobin’s Q of conglomerate companies listed in
Nigeria. The Adjusted R-squared value indicates the proportion of the variance in the
dependent variable (Tobin’s Q) that is predictable from the independent variables (product
diversification, subsidiary diversification, regional diversification, and sector diversification),
adjusted for the number of predictors in the model. An Adjusted R-squared of 0.308882 means
that approximately 30.89% of the variability in the Tobin’s Q can be explained by the model
that includes the various types of diversification. While this indicates a moderate level of

Page | 156 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

explanatory power, it also suggests that there are other factors not included in the model that
could explain the remaining 69.11% of the variability in Tobin’s Q.

The Prob(Rn-squared stat) evaluates the overall significance of the regression model. It tests
the null hypothesis that all of the regression coefficients are equal to zero, implying that none
of the independent variables have an effect on the dependent variable. A Prob(Rn-squared
stat) value of 0.000000 (which is essentially less than 0.05) indicates that the model is highly
significant. This means that there is a very strong evidence against the null hypothesis, and at
least one of the diversification variables (product, subsidiary, regional, or sector
diversification) significantly affects Tobin’s Q.

4.2.1 Hypothesis I
Table 5 shows that the coefficient for product diversification is -0.476151, indicating a
negative relationship between product diversification and Tobin's Q. The probability value
(0.0000) which is less than 0.05 indicates that product diversification has a significant and
negative impact on the value of conglomerate companies in Nigeria.

4.2.2 Hypothesis II
The coefficient for subsidiary diversification is 3.146852, indicating a positive relationship
with Tobin's Q. The probability value (0.0001) which is less than 0.05 shows that this effect
is highly statistically significant. Therefore, subsidiary diversification has a significant and
positive effect on the value of conglomerate companies in Nigeria.

4.2.3 Hypothesis III

H03: The coefficient for regional diversification is 1.034557, indicating a positive relationship
with Tobin's Q. The probability value (0.0001) is less than 0.05 confirms that this relationship
is highly statistically significant. Thus, regional diversification positively and significantly
affects the value of conglomerate companies in Nigeria.

4.2.4 Hypothesis IV
The coefficient for sector diversification is -0.928505, indicating a negative relationship with
Tobin's Q. The probability value (0.0072) suggests that this result is statistically significant.
Thus, sector diversification has a significant and negative impact on the value of conglomerate
companies in Nigeria.

Page | 157 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

Discussion of Findings
The study indicates that product diversification has a negative effect on the corporate value
of listed companies in Nigeria. This outcome may be attributed to several factors. Primarily,
venturing into multiple product lines can stretch a company's resources too thin, leading to
inefficiencies and higher operational costs. Additionally, managing a diverse range of
products requires significant expertise and coordination, which may not be adequately present
in Nigerian conglomerates. This lack of specialized knowledge and the increased complexity
can dilute the overall strategic focus, leading to suboptimal performance and a consequent
decrease in corporate value. This agrees with the findings by Lahouel, Taleb, Kočišová and
Zaied (2022); Martiningtiyas, Muchtar, Ristiqomah and Rahman (2022); Adesina (2021) but
counters those by Suleiman (2022); Nova (2022); Okoye and Ezenwafor (2022); Okpala and
Omaliko (2022); Ajao and Kokumo-Oyakhire (2021).

Conversely, subsidiary diversification has a positive effect on corporate value. Subsidiary

diversification involves expanding through the creation or acquisition of subsidiary
companies, each potentially operating in distinct industries or markets. This strategy can be
beneficial as it allows companies to leverage the expertise of specialized management teams
within each subsidiary. Moreover, subsidiaries can operate with a degree of autonomy,
fostering innovation and responsiveness to market changes. For Nigerian conglomerates, this
approach might help in mitigating risks associated with any single business line and exploiting
growth opportunities in various sectors, thereby enhancing overall corporate value. This
agrees with the position of Githaiga (2022); Addai, Tang, Gyimah and Twumasi (2022); but
disagreed with Suleiman (2022).

Regional diversification also positively affects corporate value. Expanding operations into
different geographic regions can provide several advantages, such as access to new markets,
diversification of market risk, and exploitation of regional economic strengths. For Nigerian
companies, regional diversification can be particularly beneficial due to the varying economic
conditions and consumer behaviors across different regions. By operating in multiple regions,
companies can balance the risks and opportunities presented by different markets, leading to
more stable and potentially higher earnings, which in turn enhances corporate value. Nova
(2022); Addai, Tang, Gyimah and Twumasi (2022); Githaiga (2022); Okpala and Omaliko
(2022); Clinton and Salami (2021) found similar positive effect, agreeing with the position of
the present study.

Page | 158 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

Sector diversification, however, shows a negative effect on corporate value. Sector

diversification involves spreading business operations across different industry sectors. This
strategy might seem advantageous for risk mitigation, but it often leads to a loss of strategic
focus and increased complexity in management. In the context of Nigerian conglomerates,
entering unfamiliar sectors can result in inadequate market knowledge, inefficient allocation
of resources, and difficulties in achieving synergies between disparate business units. These
challenges can outweigh the benefits of risk diversification, ultimately leading to a decline in
corporate value. This finding does not align with the findings by Bank, Ünal, and Güneysu,
(2022) but corroborates that of Martiningtiyas, Muchtar, Ristiqomah and Rahman (2022);
Lahouel, Taleb, Kočišová and Zaied (2022).

CONCLUSION AND RECOMMENDATION

Corporate diversification is a strategic approach employed by conglomerate companies to
mitigate risks, capitalize on synergies, and enhance overall firm value. In the context of
Nigerian conglomerate companies, diversification takes various forms, including product
diversification, subsidiary diversification, regional diversification, and sector diversification.
The study aimed to evaluate the effect of these diversification strategies on the value of these
companies, measured by Tobin's Q. The findings reveal a complex picture: product
diversification negatively affects corporate value, while subsidiary and regional
diversification have positive effects. Conversely, sector diversification also detracts from
corporate value.

Based on the findings, expanding the range of products may lead to inefficiencies and
increased operational complexities, which can outweigh the potential benefits of risk
reduction. In the Nigerian context, product diversification might dilute the company's focus,
leading to challenges in maintaining quality, increasing costs, and misallocating resources.
Furthermore, the market for diverse products may not be well-developed, resulting in lower-
than-expected returns on diversified product portfolios. However, creating or acquiring
subsidiaries allows companies to enter new markets, leverage specialized management, and
exploit unique opportunities. Subsidiary diversification can lead to better resource allocation
and more effective management of distinct business units, enhancing overall efficiency and
profitability. Similarly, expanding operations across different geographical regions helps
companies mitigate regional risks, tap into new customer bases, and leverage regional growth
opportunities. For Nigerian conglomerates, regional diversification can provide a buffer
against local economic downturns and political instability, fostering a more stable revenue

Page | 159 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

stream. Additionally, entering new regions may facilitate access to diverse resources, talent
pools, and market dynamics, enhancing the overall competitive advantage and value of the
firm.

Finally, spreading investments across various sectors might dilute strategic focus and lead to
suboptimal management of diversified business units. Sector diversification can increase
complexity and management challenges, resulting in inefficiencies and higher costs. In
conclusion, not all forms of diversification contribute positively to the value of conglomerate
companies in Nigeria. While subsidiary and regional diversification strategies appear to
enhance corporate value by leveraging specialized management and geographical expansion,
product and sector diversification may introduce inefficiencies and strategic misalignments
that diminish firm value.

REFERENCES
Addai, B., Tang, W., Gyimah, A. G., & Twumasi, M. A. (2022). Income diversification and
bank performance nexus: Does corruption matter? Journal of Multinational Financial
Management, 65, 100757.
Adesina, K. S. (2021). How diversification affects bank performance: The role of human
capital. Economic Modelling, 94, 303-319.
Ahuja, G., & Novelli, E. (2017). Redirecting research efforts on the diversification–
performance linkage: The search for synergy. Academy of Management Annals, 11(1),
342-390.
Ajao, M. G., & Kokumo-Oyakhire, G. A. (2021). Corporate diversification and financial
performance of conglomerate firms in Nigeria. Journal of Business Studies and
Management Review, 5(1), 91-101.
Ajwang, M. C. (2021). Effect of Product Diversification on Financial Performance of
Telecommunication Firms in Kenya (Doctoral dissertation, University of Nairobi).
Binuyo, A. O., & Binuyo, B. O. (2019). Diversification strategy and firm profitability:
Evidence from selected fast-moving consumer goods firms in Lagos State,
Nigeria. International Journal of Innovative Science, Engineering & Technology, 6(9),
75-88.
Clinton, E., & Salami, C. G. (2021). Impact of diversification strategy on organizational
performance in manufacturing firms in Nigeria. International Research Journal of
Management, IT and Social Sciences, 8(6), 589-604.

Page | 160 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

Dhir, S., & Dhir, S. (2015). Diversification: Literature review and issues. Strategic
Change, 24(6), 569-588.
Duho, K. C. T., Duho, D. M., & Forson, J. A. (2023). Impact of income diversification
strategy on credit risk and market risk among microfinance institutions. Journal of
Economic and Administrative Sciences, 39(2), 523-546.
Ehiedu, V., & Priscilla, I. C. (2022). Effect of corporate diversification strategies on the
financial performance of industrial goods in Nigeria. International Journal of Applied
Research in Social Sciences, 4(8), 293-305.
Enrichest (2023, September 21). Diversification in Practice: An In-Depth Case Study
Analysis. Retrieved from [Link]
depth-case-study-analysis
Githaiga, P. N. (2022). Revenue diversification and financial sustainability of microfinance
institutions. Asian Journal of Accounting Research, 7(1), 31-43.
Haug, J. P., Pidun, U., & zu Knyphausen-Aufseß, D. (2018). Cui bono? An empirical
investigation into risk benefits of corporate diversification. Strategic
Organization, 16(4), 429-450.
Holtes, G. (2024). Critiquing Diversification Benefits through a Simplified Conditional
Correlation Estimator. Available at SSRN 4777167.
Krivokapić, R., Njegomir, V., & Stojić, D. (2017). Effects of corporate diversification on firm
performance: evidence from the Serbian insurance industry. Economic research-
Ekonomska istraživanja, 30(1), 1224-1236.
Lahouel, B., Taleb, L., Kočišová, K., & Ben Zaied, Y. (2022). The threshold effects of income
diversification on bank stability: an efficiency perspective based on a dynamic network
slacks-based measure model. Annals of Operations Research, 1-38.
Martiningtiyas, C., Muchtar, S., Ristiqomah, P., & Rahman, M. (2022, January). The Effect
of Diversification of Income towards the Performance of Banks Listed in the Indonesia
Stock Exchange. In Proceedings of the First Lekantara Annual Conference on Public
Administration, Literature, Social Sciences, Humanities, and Education, LePALISSHE
2021, August 3, 2021, Malang, Indonesia.
Mehmood, R., Hunjra, A. I., & Chani, M. I. (2019). The impact of corporate diversification
and financial structure on firm performance: evidence from South Asian
countries. Journal of risk and financial management, 12(1), 49.
Mindtools. (2024). Diversification. Retrieved from
[Link]

Page | 161 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

Ndungu, J. G., & Muturi, W. (2019). Effect of Diversification on Financial Performance of

Commercial Banks in Kenya. International journal of current aspects, 3(5), 267-285.
Nwakoby, N., & Ihediwa, A. (2018). Effect of diversification on the financial performance of
selected firms in Nigeria. International Journal of Advanced Academic Research, 4(12),
1-16.
Okoye, E. & Ezenwafor, E. (2022). Effect of product diversification on financial performance
of non-financial firms listed on Nigerian Stock Exchange. International Journal of
Contemporary Applied Researches, 9(1), 42-53.
Okpala, N. & Omaliko, E. (2022). Impact of corporate diversification on sustainability of
listed health care firms in Nigeria. Asian Journal of Economics, Business and
Accounting, 59-69.
Osifo, O., & Evbayiro-Osagie, E. I. (2020). Foreign diversification and performance of quoted
deposit money banks in selected Sub-Sahara African countries. Oradea Journal of
Business and Economics, 5(special), 82-93.
Osifo, O., & Obainoke, F. E. (2021). Corporate Diversification and Performance of Quoted
Deposit Money Banks in Nigeria: Evidence from Macroeconomic Variables. Polac
Management Review, 1(1), 1-11.
Phan, D. T., Nguyen, T. T., & Hoang, T. T. (2022). Impact of income diversification on the
business performance of Vietnamese commercial banks. Cogent Business &
Management, 9(1), 2132592.
Poretti, C., Weisskopf, J. P., & de Régie, P. D. V. (2024). Innovative business strategies,
corporate performance, and firm value in the travel and leisure industry. International
Journal of Hospitality Management, 118, 103683.
Quyen, P. G., Ha, N. T. T., Darsono, S. N. A. C., & Minh, T. D. T. (2021). Income
diversification and financial performance: The mediating effect of banks’ size,
ownership structure, and the financial crisis in Vietnam. Journal of Accounting and
Investment, 22(2), 296-309.
Riswan, R., & Suyono, E. (2016). Corporate diversification: Destroying or increasing firm
value? Empirical evidence from Indonesia. Corporate Ownership & Control. 14 (4).
Suleiman, U. G. (2022). The Effect of Corporate Diversification on the Financial Performance
of Quoted Firms in Nigeria. Journal of Research in Administrative Sciences (ISSN:
2664-2433), 11(2), 1-9.
Volkov, N. I., & Smith, G. C. (2015). Corporate diversification and firm value during
economic downturns. The Quarterly Review of Economics and Finance, 55, 160-175.

Page | 162 Department of Accountancy, Nnamdi Azikiwe University © September, 2024

 JOURNAL OF GLOBAL ACCOUNTING
10(3) September, 2024.
ISSN (Online): 1597–7641; ISSN (Print): 1597-8273
JOGA [Link]

Wijethilaka, E. T. S. (2015). Impact of Bank Income Diversification to Bank Performance:

Evidence from Sri Lanka. [Link]

Page | 163 Department of Accountancy, Nnamdi Azikiwe University © September, 2024