This study investigates the impact of business area diversification across vertical and horizontal dimensions on the efficiency of Korean biopharmaceutical companies. Utilising data from 187 firms and 1,830 observations between 2015 and 2021, this study employs Stochastic Frontier Analysis (SFA) and Meta-Frontier Analysis to examine how diversification strategies influence firm efficiency. The results indicate that vertical diversification, particularly in high-value sectors like biopharmaceutical equipment, shows a strong potential for enhancing firm efficiency. On the other hand, the effects of horizontal diversification vary, with efficiency improvements depending on the level of diversification pursued by each company. These findings offer strategic insights for optimising business diversification in the Korean biopharmaceutical sector and guiding decision-making for long-term competitiveness.
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