Ownership identity and mitigation of diversification discount: Evidence from Malaysia
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...
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| Main Authors: | , |
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| Format: | Article |
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Malaysian Economic Association
2018
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| Online Access: | http://eprints.sunway.edu.my/1404/ https://mjes.um.edu.my/article/view/11767/7846 https://doi.org/10.22452/MJES.vol55no1.6 |
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| Institution: | Sunway University |
| Summary: | 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. |
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