We investigate the effect of product diversity and geographic diversity on the performance of SMEs, using an integration of the upper echelons literature with the product and geographic diversification literature. We propose an inverted U shaped relationship between product (geographic) diversification (PD/GD) and the performance of SMEs. We also propose that effect of PD and GD is contingent on one another and the TMT experience. We find that both PD and GD have an inverted U shaped relationship with the SME performance. Further, PD and GD interact positively to enhance each other's value in affecting firm performance. TMT experience also enhances the value of PD and GD for firm performance.
All Science Journal Classification (ASJC) codes
- Business and International Management
- Strategy and Management
- Geographic diversification
- Product diversification
- Top management teams