Does diversification add firm value in emerging economies? Effect of corporate governance
Journal
Journal of Business Research
Journal Volume
66
Journal Issue
12
Pages
2425
Date Issued
2013
Author(s)
Li, SM
Abstract
Using 205 Taiwanese firms spanning five years, this research examines how corporate governance factors specific to emerging economies determine the extent of diversification and moderate its performance. The analyses reveal that controlling family ownership is significantly associated with a greater extent of diversification, which impairs firm value. Conversely, domestic bank ownership significantly decreases diversification, which in turn increases diversification performance. These findings present the evidence of controlling family entrenchment through diversification and the significant role domestic banks play in the principal-principal corporate governance framework. ? 2013 Elsevier Inc.
Subjects
Diversification; Controlling family; Institutional investor; Principal-principal conflict; Corporate governance
Publisher
ELSEVIER SCIENCE INC
Type
journal article