Original scientific paper
https://doi.org/10.1080/1331677X.2017.1340175
Effects of corporate diversification on firm performance: evidence from the Serbian insurance industry
Ranka Krivokapić
; Maritime Faculty of Kotor, University of Montenegro, Dobrota, Montenegro
Vladimir Njegomir
; Faculty of Law and Business studies, Department of Economics, dr Lazar Vrkatic Union University, Novi Sad Serbia
Dragan Stojić
; Faculty of Economics, Department of Quantitative Methods in Economics, University of Novi Sad, Novi Sad Serbia
Abstract
The aim of this paper is to provide empirical evidence on the relation
between line-of-business diversification and performance for the
insurance companies that operated in the republic of Serbia in
the period 2004–2014. The research results show that the relation
between risk-adjusted returns measured both by return on assets and
return on equity and line-of-business diversification and performance
measured by entropy is significant and positive, which means that
diversified insurers outperform undiversified insurers. These results
could be useful in decision making for insurance companies as they
suggest the need for diversification (specialisation), growth in size,
capitalization and affiliation (grouping).
Keywords
Insurance; diversification; conglomeration; performance
Hrčak ID:
193180
URI
Publication date:
1.12.2017.
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