**5. Conclusions**

The manufacturing sector plays a substantial role in the economic development of a country. This sector is opting for diversification strategies for growth and survival in a competitive business environment. The objective of our study is to analyze the impact of corporate diversification and financial structure on the financial performance of the manufacturing firms of South Asian Countries. Financial structure describes financing, dividend, and investment policies. We categorized corporate diversification as product and geographic diversification. Therefore, we ran three models for each one of the independent variable; two separate models for product diversification and geographic diversification and one overall model for both. Although some results relating to product diversification and geographic diversification follow Agency Theory, where managers prefer diversification strategy for their personal benefits, which adversely affects financial performance but still we found mixed output. The varying results are the reasons of different circumstance and economic condition of the respective countries. We found dividend policy is a determinant of financial performance of the firms. Investment plans show a general trend of insignificant impact on the firms' financial performance. Corporate governance and audit quality characteristics on the firm's financial performance revealed varying outputs in our study.

Based on the results, we drew several policy implications including that the manufacturing sector needs to apply efficient financial structure to improve its financial performance. In general, our results sugges<sup>t</sup> that diversification improves firms' financial performance but still there is a need of proper managemen<sup>t</sup> of diversification decisions as excessive diversification can lead to a decrease in firms' financial performance. There is a need to efficiently utilize the firms' resources to apply proper diversification strategies. The capital structure showed significant impact on firms' financial performance which suggests that there is need for an efficient mix of debt and equity in order to decrease the capital cost, which can increase the profitability, and value of the firms. We suggested firms follow a proper dividend policy to attract investors. In addition, effective managemen<sup>t</sup> of corporate diversification with good corporate governance and proper implication of financial structure can improve the financial performance of manufacturing firms.

**Author Contributions:** R.M. worked on conceptualization, writing—original draft preparation, resources, data curation and formal analysis. A.I.H. contributes in writing—review and editing, supervision whereas M.I.C. handles the methodology, software and formal Analysis.

**Funding:** We received no funding for this project.

**Conflicts of Interest:** We declare there is no conflict of interest.
