How Does Group Affiliation Affect The Diversification Performance Of Familycontrolled Firms In Malaysia? – A Governance Perspective
This paper examines the roles of business group affiliations and whether the size and ownership structure of business groups influence the performance outcomes of diversification among family-controlled firms in Malaysia. It presents evidence that agency-driven and thus performance-diminishing fi...
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| Format: | Article |
| Language: | English |
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Asian Academy of Management (AAM)
2014
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| Online Access: | http://eprints.usm.my/40025/1/AAMJAF_10-2-5_%2881-115%29.pdf |
| _version_ | 1825834162631737344 |
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| author | Ng , Sin Huei |
| author_facet | Ng , Sin Huei |
| author_sort | Ng , Sin Huei |
| collection | USM |
| description | This paper examines the roles of business group affiliations and whether the size and
ownership structure of business groups influence the performance outcomes of
diversification among family-controlled firms in Malaysia. It presents evidence that
agency-driven and thus performance-diminishing firm diversification is more likely to
take place in firms affiliated with a family-controlled business group than in independent
firms. The findings support the hypothesis that if the benefits of diversification can be
captured through group-level diversification, then diversification at the firm level is more
of an act of expropriation. In Malaysia, the undue political interference in business that
to a certain extent has contributed to a weak enforcement of rules causes the enhanced
control of family ownership through the formation of large and structurally complicated
business groups to go unchecked. This grants the controlling families opportunities to
pursue sub-optimal firm diversification policies that bring them more self-interested
benefits at the expense of firm performance. |
| first_indexed | 2024-03-06T15:18:37Z |
| format | Article |
| id | usm.eprints-40025 |
| institution | Universiti Sains Malaysia |
| language | English |
| last_indexed | 2024-03-06T15:18:37Z |
| publishDate | 2014 |
| publisher | Asian Academy of Management (AAM) |
| record_format | dspace |
| spelling | usm.eprints-400252018-04-11T04:03:53Z http://eprints.usm.my/40025/ How Does Group Affiliation Affect The Diversification Performance Of Familycontrolled Firms In Malaysia? – A Governance Perspective Ng , Sin Huei HD28-70 Management. Industrial Management This paper examines the roles of business group affiliations and whether the size and ownership structure of business groups influence the performance outcomes of diversification among family-controlled firms in Malaysia. It presents evidence that agency-driven and thus performance-diminishing firm diversification is more likely to take place in firms affiliated with a family-controlled business group than in independent firms. The findings support the hypothesis that if the benefits of diversification can be captured through group-level diversification, then diversification at the firm level is more of an act of expropriation. In Malaysia, the undue political interference in business that to a certain extent has contributed to a weak enforcement of rules causes the enhanced control of family ownership through the formation of large and structurally complicated business groups to go unchecked. This grants the controlling families opportunities to pursue sub-optimal firm diversification policies that bring them more self-interested benefits at the expense of firm performance. Asian Academy of Management (AAM) 2014 Article PeerReviewed application/pdf en http://eprints.usm.my/40025/1/AAMJAF_10-2-5_%2881-115%29.pdf Ng , Sin Huei (2014) How Does Group Affiliation Affect The Diversification Performance Of Familycontrolled Firms In Malaysia? – A Governance Perspective. Asian Academy of Management Journal of Accounting and Finance, 10 (2). pp. 1-35. ISSN 1823-4992 http://web.usm.my/journal/aamjaf/10-2-5-2014.html |
| spellingShingle | HD28-70 Management. Industrial Management Ng , Sin Huei How Does Group Affiliation Affect The Diversification Performance Of Familycontrolled Firms In Malaysia? – A Governance Perspective |
| title | How Does Group Affiliation Affect The
Diversification Performance Of Familycontrolled Firms In Malaysia?
– A Governance Perspective |
| title_full | How Does Group Affiliation Affect The
Diversification Performance Of Familycontrolled Firms In Malaysia?
– A Governance Perspective |
| title_fullStr | How Does Group Affiliation Affect The
Diversification Performance Of Familycontrolled Firms In Malaysia?
– A Governance Perspective |
| title_full_unstemmed | How Does Group Affiliation Affect The
Diversification Performance Of Familycontrolled Firms In Malaysia?
– A Governance Perspective |
| title_short | How Does Group Affiliation Affect The
Diversification Performance Of Familycontrolled Firms In Malaysia?
– A Governance Perspective |
| title_sort | how does group affiliation affect the diversification performance of familycontrolled firms in malaysia a governance perspective |
| topic | HD28-70 Management. Industrial Management |
| url | http://eprints.usm.my/40025/1/AAMJAF_10-2-5_%2881-115%29.pdf |
| work_keys_str_mv | AT ngsinhuei howdoesgroupaffiliationaffectthediversificationperformanceoffamilycontrolledfirmsinmalaysiaagovernanceperspective |