Examining the Drivers and Outcomes of Corporate Diversification: Strategic Motives, Firm Performance, and Shareholder Value in Southwestern Nigeria's Manufacturing

This research examines the drivers and outcomes of corporate diversification, focusing on strategic motives and their impact on long-term shareholder value within manufacturing firms in Southwestern Nigeria. Using data from 200 respondents and quantitative analyses descriptive statistics, correlation, and regression techniques the study finds a moderate but significant negative correlation between diversification and shareholder value (Pearson correlation = -0.282, p = 0.000). Regression analysis further confirms this negative impact (unstandardized coefficient B = -0.725, p = 0.000), indicating that diversification may hinder sustainable growth and competitive advantage compared to non-diversified firms. The findings align with previous studies on the ‘diversification discount,’ suggesting that unrelated diversification can reduce firm efficiency and investor returns. The study concludes by recommending that firms pursue related diversification and strengthen internal capabilities before expanding. Policymakers are encouraged to establish a supportive environment for corporate diversification.