Impacts of geographic diversification on restaurant firms’ risk: Domestic vs. international diversification

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• 作者：Sujin Song ; ^{sxs6040@psu.edu} ; Sungbeen Park ^{spp5178@psu.edu} ; Seoki Lee ^{leeseoki@psu.edu}
• 关键词：Geographic diversification ; Domestic diversification ; International diversification ; Market-based risk ; Operational risk
• 刊名：International Journal of Hospitality Management
• 出版年：2017
• 出版时间：February 2017
• 年：2017
• 卷：61
• 期：Complete
• 页码：107-118
• 全文大小：863 K
• 卷排序：61

文摘

In the hospitality context, the diversification literature has evolved to mostly focus on the impact of diversification on firm performance. However, without accounting for risk, the effect of diversification on firm value likely provides an incomplete picture. Therefore, this study investigates the influence of domestic and international geographic diversification on restaurant firms’ risk. This study uses the Berry-Herfindahl Index to measure the degree of domestic and international geographic diversification. Findings show a non-linear relationship between geographic diversification and restaurant firms’ risk. However, different shapes of the non-linear relationship are revealed between domestic and international geographic diversification and between operational and market-based risk. The results of this study indicate that the risk-reduction effects argued from the modern portfolio theory may be partially applicable to the geographic diversification for restaurant firms, suggesting a different view toward financial diversification and corporate diversification.