Product and international diversification among Japanese multinational firms

This paper examines the relationship of performance with product and intern ational diversification on Japanese multinational firms from 1977 to 1993. We show the relationships between diversification and performance change ov er time through the use of multiple time periods and accounting for keirets u membership. Results show that while diversity strategies vary between kei retsu and non-keiretsu firms, performance is not much different. Across tim e periods, performance varies considerably, but strategies are less variabl e. Product diversity has weak effects on firm performance only in one time period while international diversification has negative profitability and p ositive growth consequences in in some periods. These results suggest first that diversification strategies and their effects on performance vary acro ss time periods and generally produce some unexpected findings. We do not f ind strong interactive diversity effects. Copyright (C) 2000 John Wiley & S ons, Ltd.