LIM, Elisabeth Ngah-Kiing <br/><br/>
Diversification strategy, capital structure, and the asian financial crisis (1997-1998) :  evdence from Singapore firms 

 - Bognor Regis :  Wiley-Blackwell,  June 2009 
<br/><br/> We use agency theory to predict the influence of related and unrelated product diversification on a firm's level of debt financing. Further, we argue that the link between diversification and capital structure is moderated by the environment in which firms operate. Using SAS PROC MIXED, we fit a mixed-effects model to our unique six-year longitudinal dataset (1995-2000) of 245 publicly listed Singapore firms. Our data spans the period of the Asian Financial Crisis (1997-1998). We find that firms pursuing unrelated product diversification take on less debt financing in stable environments, but more debt financing in dynamic environments. Using longitudinal structural equation modeling, we find a reciprocal relationship between a firm's product diversification strategy and its debt financing level.