A Study on Relationship between Diversification Strategy, Firm Performance and Risk: Evidence from Tehran Stock Exchange
Reza Raei, Reza Tehrani, Banafsheh Farhangzadeh

Abstract
The aim of this paper is to analyze and to test relationship between diversification strategy, firm performance and risk. To test the research hypotheses, a sample of 63 companies listed in Tehran Stock Exchange over the period 2008-2012 was taken .Analysis of the research models is based on panel(data) analysis. In these modelsthe presence or absence of effects models (fixed or random) is reviewed and finally the best model is estimated. Inference is based on significant level or p-value, thus likely that any value or significance level of the test is less than 0.05 is rejected at the 95 percent confidence level. The results indicate that there is no significant relationship between diversification strategy, firm performance and risk.

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