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The Impact of Business Diversification on Performance of IDX Listed Firms

Indonesian Capital Market Review

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Title The Impact of Business Diversification on Performance of IDX Listed Firms
 
Creator Ony Humarseno; Department of Management, Faculty of Economics and Business, Universitas Indonesia
Dony Abdul Chalid; Department of Management, Faculty of Economics and Business, Universitas Indonesia
 
Description This study analyzes the correlation between business diversification and performances in Indonesian listed companies from 2006-2011. In addition to observing business diversification impact on company’s performance in term of Return on Assets (ROA) and Tobin’s Q, this research also observes the business diversification impact on the performances of different companies at different level. The result of this research indicates that diversification gives negative effect to ROA and Tobin’s Q, while for higher level of diversification, the effect on Tobin’s Q is relatively high. The negative effect of diversification on ROA is higher in the group of companies with higher ROA. The different results show that when using Tobin’s Q as a measure of companies’ performances, diversification gives negative impact to companies’ performance in the intermediate level.   Keywords: Diversification, companies’ performance, ROA, quantile regression, Tobin’s Q
 
Publisher Management Research Center, Department of Management, Faculty of Economics and Business, U
 
Contributor —
 
Date 2013-07-01
 
Type Peer-reviewed Article
 
Format application/mbox
 
Identifier http://journal.ui.ac.id/index.php/icmr/article/view/1902
 
Source Indonesian Capital Market Review; Vol 5, No 2 (2013): July 2013
 
Language en