The relation between Taiwan partnership accounting firms service diversification, economies of scale and financial performance

• Main Authors: Jung-Yu Wang, 王中鈺
• Other Authors: Bao-Guang Chang
• Format: Others
• Language: zh-TW
• Published: 2007
• Online Access: http://ndltd.ncl.edu.tw/handle/83724988622384145746

碩士 === 淡江大學 === 會計學系碩士班 === 95 === This article discusses the relationship between business diversification strategies and financial performance, which is rarely discusses in professional documents, but has been the most important component among actual practical managements in the partnership accounting firm area. The data of partnership accounting service firm from 1995 to 2002 had been analyzed by the Taiwan Ministry of Finance; there are approximately two main results from this analysis. First, due to the difference of the returns to scale condition, the relation between the diversification of accounting firms and its financial performance is shown as a non-linear, inverse U shape graph. When firms are under the condition of increasing (decreasing) returns to scale, the higher (lower) level of business diversification, the higher (lower) financial performance they will experience. This result indicates that there is a most suitable spot in business diversification; the result of specialized service industry is also similar to the experimental result of the global economic system in various industries, which shows a non-linear relation between service diversification and enterprise performance. Second, since the real diagnosis of this article integrates the sample of small partnership accounting firms, the result naturally extends the correlation and theory that financial performance will be higher when the business diversification is more balanced, which further discover that the smaller (bigger) scale of the accounting firms, their business diversification will be more imbalanced (balanced), that financial performance will reflect badly (better) as asymmetrical relations. The diagnosis results of the above may supply as references to the management class of accounting firms.