Individual and Joint Performance Effects of Diversification, Geographic Scope and Organizational Leverage in Professional Service Firms: A Study of German Law Firms

摘要: Extant theory and empirical evidence suggest that strategies of diversification geographic scope expansion carry benefits as well costs. However, it is unclear whether the arguments relating with firm performance are applicable in specific context professional service firms (PSFs). These also characterized by particular organizational features, such importance maintaining an optimal leverage ratio, defined ratio between junior professionals senior ones partners. Our hypothesis development suggests inverted U-shaped relationship line diversification, on one hand, PSF other. We empirically test these relationships using fixed-effects regression polynomial response surface analysis (RSA) panel data from 61 German law 2003 to 2012. RSA provides a finely-grained understanding among variables interest. find effect leverage, but no performance. Moreover, we complementary ratio. conclude discussion our findings their implications for practice.