Product diversification and profitability a case study: Vestel A.Ş.

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Date

2015

Author

Akgül, Banu

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The aim of this study is to examine the effect of diversification on the profitability of a firm. To this end, Vestel Co. is examined by conducting an econometric analysis with panel data gathered from different departments of the firm. Importance and the most significant contribution of this study to the literature is that it analyzes a single firm in contrast to the studies including lots of firms operating in the same sector; and this allows us to examine the effect of diversification over time, through the firm’s lifetime. Data used in this study have been compiled from different sources within Vestel: Budget and Planning, Research and Strategic Analysis, Finance, and Law Departments starting from the first quarter of 1994 to second quarter of 2014. As the results show, there exists u-shape relationship between diversification and the firm’s profitability; i.e., with an increase in the level of diversification profitability also increases in the long run in case of related diversification. Although, the effect of intangible assets is negative on profitability in the short-run, its effect reverse and turn to positive in the long run. The most important result of this study is that, with related diversification, the firm gains profitability and enjoys its intangible assets in the long run.

Subject Keywords

Panel analysis., Costs, Industrial., Product management., Diversification in industry.

URI

http://etd.lib.metu.edu.tr/upload/12618659/index.pdf
https://hdl.handle.net/11511/24566

Collections

Graduate School of Social Sciences, Thesis

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Citation Formats

B. Akgül, “Product diversification and profitability a case study: Vestel A.Ş.,” M.S. - Master of Science, Middle East Technical University, 2015.