IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Expropriation of Minority Interests and Corporate Diversification in Malaysia

  • Zuaini Ishak

    ()

    (Faculty of Accountancy, Universiti Utara Malaysia, 06010 UUM, Sintok, Kedah)

  • Christopher Napier

    (School of Management, Royal Holloway, University of London, Egham, Surrey, TW20 OEX, United Kingdom)

Registered author(s):

    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.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://web.usm.my/journal/aamjaf/vol2-1/2-1-5.pdf
    Download Restriction: no

    Article provided by Penerbit Universiti Sains Malaysia in its journal Asian Academy of Management Journal of Accounting and Finance.

    Volume (Year): 2 (2006)
    Issue (Month): 1 ()
    Pages: 85-113

    as
    in new window

    Handle: RePEc:usm:journl:aamjaf00201_85-113
    Contact details of provider: Web page: http://web.usm.my/aamj/

    More information through EDIRC

    No references listed on IDEAS
    You can help add them by filling out this form.

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:usm:journl:aamjaf00201_85-113. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Journal Division)

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.