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Impact of Corporate Governance on Diversification in Finance Companies: Evidence from Malaysia

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  • Basiru Salisu KALLAMU

    (University Putra Malaysia, Malaysia.)

Abstract

The board of directors performs a very important role in formulating and monitoring the strategy of a company. Recent development in technology and the change in business environment as well as change in the nature of demand by customers has necessitated the change in the products and services offered by finance companies. Based on data from finance companies listed on Bursa Malaysia over the period 2007 to 2011 this paper examined the impact of board attributes and ownership structure on the corporate strategy of finance companies in Malaysia. The result indicates that expertise of directors and past performance is significant and negatively related with diversification. The study contributes to the literature on corporate governance of finance companies in relation to their diversification strategy and has highlighted the corporate governance mechanisms and regulatory measures appropriate for the sector in order to enhance monitoring so as to achieve sustainable economic development.

Suggested Citation

  • Basiru Salisu KALLAMU, 2016. "Impact of Corporate Governance on Diversification in Finance Companies: Evidence from Malaysia," Journal of Economics Bibliography, EconSciences Journals, vol. 3(1), pages 108-122, March.
    • Handle: RePEc:cvv:journ6:v:3:y:2016:i:1:p:108-122
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    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy; Modern Monetary Theory
    • H54 - Public Economics - - National Government Expenditures and Related Policies - - - Infrastructures
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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