The effects of product diversification on firm performance and complementarities between products: A study of US casinos |
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| Authors: | Kyung Ho Kang Seoki Lee Hongsuk Yang |
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| Affiliation: | 1. School of Tourism and Hospitality Management, Temple University, 1810 North 13th Street, 312 Speakman Hall, Philadelphia, PA 19122, USA;2. School of Tourism and Hospitality Management, Temple University, 1810 North 13th Street, 314 Speakman Hall, Philadelphia, PA 19122, USA;3. Graduate School of Business, Seoul National University, 599 Gwanangno, Gwanak-gu, Seoul 151-916, South Korea |
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| Abstract: | In spite of the growing importance of product diversification strategy and the existence of varying degrees of product diversity in the US casino industry, research of the effect of product diversification on firm performance has been sparse. By examining the impact of the degree of product diversification on both financial market- and accounting-based firm performance of sampled US casinos and complementarities between products, this study attempts to fill the gap in the hospitality literature. Results of this study show an inverse U-shaped relationship between the degree of product diversification and firm performance and complementarities between gaming business and food and beverage (F&B) business. These findings suggest that US casinos take into account both costs and benefits associated with product diversification, and consider F&B operations more preferentially as a supplementary business when implementing product diversification strategy. |
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| Keywords: | Product diversification Complementarity Firm performance Casino industry |
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