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The professional service sector plays a crucial role in the world economy, especially in emerging countries. This research explores the impact of diversification strategies and operational capabilities on financial performance in Thai professional firms. Financial data of 96 companies in the service sector listed on the Stock Exchange of Thailand (SET) was collected. Partial Least Squares (PLS) regression was selected as an analysis method. The results find that service diversification strategy, but not international diversification strategy, has a significant effect on a firm’s financial performance. The empirical findings support the importance of diversification strategies. The result also shows that operational capabilities have a significant negative impact on a firm’s financial performance. This study contributes to previous literature in a few ways. The first contribution lies in explaining the direct effect of service and international diversification strategies and operational capabilities on a firm’s financial performance. Second, this study advances service and management literature by exploring professional service firms in an emerging country, Thailand. The professional service sector plays an important role in Thailand and other emerging countries’ economies.

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Thirathon, U., & Meeprom, S. (2020). The impact of diversification strategies and operational capabilities on financial performance in Thai professional service firms. International Journal of Business and Administrative Studies, 6(1), 21-30. doi: https://dx.doi.org/10.20469/ijbas.6.10003-1