Does diversification add firm value in emerging economies? Effect of corporate governance

Yung-Chih Lien and Shaomin Li

Journal of Business Research, 2013, vol. 66, issue 12, 2425-2430

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.

Keywords: Diversification; Controlling family; Institutional investor; Principal–principal conflict; Corporate governance (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbrese:v:66:y:2013:i:12:p:2425-2430

DOI: 10.1016/j.jbusres.2013.05.030

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