The Relationship Between Firm Diversification and Firm Performance: Empirical Evidence from Indonesia

• 발행기관: 한국유통과학회
• 저자명: Heru CAHYO Hadri KUSUMA D. Agus HARJITO Zaenal ARIFIN
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.3, 497~504쪽, 전체 8쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.03.30

영문 초록

This extended study aims to analyze empirically the influence of firm diversification on firm performance moderated by the stages of the firm life cycle, which consists of introduction, growth, maturity, and decline. The target population of this study is the firms listed on the Indonesian Stock Exchange. The sampling method uses purposive sampling in the multi-business firm in Indonesia; it includes as many as 127 firms over the period from 2011 to 2017, totaling 889 firm-year observations. The firm performance is measured using a return of equity while the level of firm diversification with the minimum number of two operating segments is proxied by the Herfindahl index. The analysis method used in this study is the estimator model of the Generalized Method of Moment (GMM). The main findings show that the firm life cycle at the stage of growth and maturity significantly strengthens the influence of firm diversification on firm performance. On the other hand, the stage of decline fails to moderate the relationship between firm diversification and firm performance. This study discusses the implications and contributions of the findings theoretically, and provide some policy justifications for potential investors before they invest their money in the capital market.

목차

1. Introduction

2. Literature Review and Hypothesis Development

3. Research Method

4. Results and Discussions

5. Conclusions

References

키워드

Life Cycle Diversification Firm Performance Indonesia