چکیده:
There is little consensus on the corporate diversification-efficiency relationship in the diversification literature. The study aims to contribute to the literature by looking jointly at two dimensions of corporate diversification as product diversification and international diversification and the relationship between them. The results show negative relationship between product diversification and efficiency, international diversification and efficiency and corporate diversification and efficiency in manufacturing firms listed in Bursa Malaysia. This study also has described main variables which have an impact on the diversification-efficiency relationship and has guided managers on how to pursue an optimal diversification strategy.
خلاصه ماشینی:
The results show negative relationship between product diversification and efficiency, international diversification and efficiency and corporate diversification and efficiency in manufacturing firms listed in Bursa Malaysia.
Based on agency theory and free cash flow theory, manager pursues their own interest; therefore, in this view product diversification has a negative impact on performance (Berger and Ofek, 1995; Denis et al.
Resource-based theory (Penrose, 1959) and market power theory (Edwards, 1955) confirm positive impact and agency theory (Jensen and Meckling, 1976) and free cash flow theory (Jensen, 1986) state negative impact of diversification on firm’s financial performance.
Due to this cause, corporate diversification (product and international) in general matter have a positive effect on performance (Chang and Wang, 2007; Delios and Beamish, 2001; Kim et al.
The BCC model must be run times, once for each unit, to get the relative efficiency of all DMUs. As a brief, DEA has many advantages which these are listed as: (a) the power to compute many inputs and outputs for each organization such as firm and it is not necessary to identify parametric assumptions of old multivariate technique, and (b) the power for benchmarking members of the efficient set and determine a relationship with inefficient units (Cooper, Seiford, & Tone, 2006; Talluri, 2000).
(1993), Delios and Beamish (2001) and Chang and Wang (2007) declare corporate diversification (product and international) in general matter have a positive effect on performance because the firm can enhance scope economies from many international markets and product portfolios.