Ishak, Zuaini and Napier, Christopher (2006) Expropriation of minority interests and corporate diversification in Malaysia. Asian Academy of Management Journal of Accounting and Finance, 2. pp. 85-113. ISSN 1823-4992

PDF Restricted to Registered users only Download (396kB) | Request a copy

Abstract

This study provides evidence on ownership structures and corporate diversification by analysing 355 public listed companies (PLCs) in Malaysia.The majority of the companies in the sample have an ultimate controlling owner, particularly an individual or family.As controlling owners have on average, rights of control over a greater percentage of shares in any given company than their rights to participate in the cash flows from that company, controlling owners may have an incentive to expropriate minority interests through methods such as inefficient corporate diversification.The risk of such expropriation would be expected to be reflected in the value of highly diversified companies.The results of the research provide no evidence to support the argument that diversification reduces the value of companies. However, the finding is consistent with the argument that high control rights of controlling owner might encourage expropriation of minority interests through corporate diversification strategies.Thus, corporate diversification in Malaysia is perceived as a mixed blessing strategy.

Item Type:	Article
Uncontrolled Keywords:	ownership structure, ultimate owner, corporate diversification, control rights, cash flow rights, Malaysia
Subjects:	H Social Sciences > HF Commerce > HF5601 Accounting
Divisions:	College of Business
Depositing User:	Prof. Madya Dr. Zuaini Ishak
Date Deposited:	04 Nov 2015 02:27
Last Modified:	04 Nov 2015 02:27
URI:	https://repo.uum.edu.my/id/eprint/16067

Actions (login required)

View Item