Effects Of Corporate Diversification On Firm Performance: Evidence From The Vietnam Real-Estate Industry

Abstract

In the fields of business and finance, there has been much discussion and interest on the link between diversity and corporate success. This study attempts to investigate how diversity affects business performance in relation to the real estate market. The study looks at whether real estate businesses' strategic focus, which is defined by diversity, has a major impact on their overall success. An extensive study of the financial and operational data from a sample of real estate enterprises is carried out in order to accomplish this goal. To evaluate the profitability of these businesses, a variety of performance metrics are used, incorporating market-based metrics like return on assets (ROA), return on equity (ROE). The association between diversity and company performance is then investigated while accounting for other pertinent aspects using regression analysis on the data. The findings of this study provide valuable insights into the impact of diversification on firm performance in the real estate market. The results reveal that strategic focus, as a measure of diversification, has a statistically significant effect on firm performance. Specifically, it is found that diversification has a negative influence on firm performance, indicating that a more focused business strategy is associated with better performance outcomes for real estate companies. Despite the fact that this study is particularly focused on the real estate industry, the lessons learned from it may be applied to various fields of business. In order to give a more thorough knowledge of the link between diversity and company success, future research may take into account extending the investigation to additional industries.