Ownership Identity and Mitigation of Diversification Discount: Evidence from Malaysia

Kian-Tek Lee () and Chee-Wooi Hooy
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Kian-Tek Lee: Business School, Sunway University

Malaysian Journal of Economic Studies, 2018, vol. 55, issue 1, 97-113

Abstract: This paper examines the mitigation effect of the ultimate ownership identity on the diversification discount under the emerging market’s institutional setting. Using a sample of non-financial listed firms in Malaysia from 2002 to 2013, the study reveals that government ultimate ownership is able to mitigate the diversification discount better than family ultimate ownership by 5 to 43 percent, whereas family ultimate ownership is better than foreign ultimate ownership in mitigating the diversification discount by 30 to 118 percent. Our study also finds that a high degree of ownership concentration gives rise to the diversification discount.

Keywords: Diversification; firm value; GMM; ownership identity (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 (search for similar items in EconPapers)
Date: 2018
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Persistent link: https://EconPapers.repec.org/RePEc:mjr:journl:v:55:y:2018:i:1:p:97-113

DOI: 10.22452/MJES.vol55no1.6

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