The Effect of Diversification On Firm Performance: The Role of Family Ownership

DOI

10.2991/iconies-18.2019.59How to use a DOI?

Keywords

Diversification, firm performance, family ownership

Abstract

This study examines the effect of diversification on firm performance and also the moderating role of family ownership. We use two measures of firm performance: excess value and return-on-assets. Our samples are listed firms Indonesia Stock Exchange from 2011 to 2015 with total observations are 347 firm-years and 815 firm-years for excess value and return on assets test, respectively. We analyzed the data using panel data regression. The results show that geographic and industry diversification hurt the firm performance measured using excess value, whereas only industry diversification has an adverse effect on the performance of firms based on return on assets. Besides, family ownership does not have any moderating role on the effect of geographic diversification on performance, but it strengthens the adverse effect of industry diversification on the performance.

Copyright

© 2019, the Authors. Published by Atlantis Press.

Open Access

This is an open access article distributed under the CC BY-NC license (http://creativecommons.org/licenses/by-nc/4.0/).

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TY  - CONF
AU  - Boy Panangian
AU  - Sylvia Veronica Siregar
PY  - 2019/10
DA  - 2019/10
TI  - The Effect of Diversification On Firm Performance: The Role of Family Ownership
BT  - Proceedings of the 2018 International Conference on Islamic Economics and Business (ICONIES 2018)
PB  - Atlantis Press
SP  - 297
EP  - 302
SN  - 2352-5428
UR  - https://doi.org/10.2991/iconies-18.2019.59
DO  - 10.2991/iconies-18.2019.59
ID  - Panangian2019/10
ER  -