Corporate diversification, ownership concentration and its relationship with firm performance: A study on ASEAN manufacturing companies

• Main Authors: Cadayona, Yesterly C., De Jesus, Eunice Roi A., Hao, Nicole Willianne O., Osal, Ma. Anne Charmaine L.
• Format: text
• Language: English
• Published: Animo Repository 2014
• Subjects: Diversification in industry > Southeast Asia; Manufacturing industries > Southeast Asia
• Online Access: https://animorepository.dlsu.edu.ph/etd_bachelors/6688
• Institution: De La Salle University

Financial literature from around the world, mostly from western and South American countries, have tried to determine the relationships between ownership concentration, corporate diversification, and firm performance. Several even tried to incorporate other variables that may bring effect and relate to the study such as costs incurred in advertising market capitalization is one of them. In addition to the lack of studies regarding this topic, another problem faced by the researchers is the abundance of measures of diversification available that it is almost indeterminable which is the most appropriate one to use. Diversification has been a vey vague topic for some most of the studies regarding it have failed to establish a formal connection with ownership concentration. Hence, this study aims to shed light on the relationship of corporate diversification and ownership concentration to firm performance of the selected 288 ASEAN manufacturing companies by utilizing panel regression data and complement of Herfindahl index and entropy as measures for diversification. Sample companies have been taken primarily from ASEAN companies since related literature barely touched the region. Findings in this study revealed that among the variables, only the control variables such as the size of the book value of assets and financial leverage are significant indicators of the dependent variable, Tobin's Q under the fixed effects model. While it may be an obvious result, further recommendations to future researchers and areas for improvement have been formulated.