Diversification as an expansion strategy and its effect over operational performance in Mexican companies

Abstract

The purpose of this research paper is to analyze the effect of diversification, implemented as a growth strategy, on the operational performance (EBITDA) using the Resource Based View (RBV) as a theoretical framework. The data is obtained from secondary sources of 133 companies in the Mexican Stock Exchange (MSE) from the year 2016. Taking a quantitative approach and analyzing the data using OLS regression, the results show that non-diversified companies obtain better operating performance and consequently, a better competitive advantage. This finding is obtained including both types of diversification, related and nonrelated, allowing with this a better explanation from the effects of diversification on operational performance.