Abstract
In recent years, the relationship between performance and a variety of companies has been an important experimental issue in financial management. Diversification strategies can affect the competitive balance in the industry. This study aims to measure the relationship between the two variables of diversification and financial ratios as criteria for accounting-based performance using required statistical tests. This research follows the post facto Method with a practical purpose. The statistical sample of this research is 99 companies listed in the Tehran Stock Exchange Market. The results of this research have shown that applying a relevant diversification strategy has no impact on the financial performance of producing companies and irrelevant strategies have a diverse tie with performance indicators and the growth of the company. Moreover, the impact of control variables of company size, financial leverage, growth opportunities, and the ratio of market value of equity to book value of equity on the relationships between research variables and assumptions have been measured in this study.
Keywords: Product Diversification Strategy, Relevant Diversification, Irrelevant Diversification, Financial Performance, Company’s Growth
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