The efficiency of internal capital markets: Evidence from the Annual Capital Expenditure Survey

Agarwal, Sumit; Chiu, I-Ming; Souphom, Victor; Yamashiro, Guy M.

doi:10.1016/j.qref.2011.01.003

Cited by 7 publications

(2 citation statements)

References 32 publications

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“…The composite nature of diversified firms therefore requires a strategy of resource allocation by the headquarters of the firm segments to redistribute the corporate resources efficiently to all the segments for an optimum use. As a strategy, a systematic mechanism of auditing, monitoring and reward packages is done in order that productivity within segments is enhanced (Agarwal et al , 2011). Basically two forms of diversification are essential to this study and these are international and industrial forms of diversification.…”

Section: Diversificationmentioning

confidence: 99%

Moderating role of productivity on diversified conglomerates and performance: the case of Malaysia

Gyan

2017

APJBA

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Purpose -The purpose of this paper is to investigate the previous mixed findings in the relationship between diversification and firm performance. Using international and industrial conglomerates, the paper introduces productivity as a moderating variable to ascertain whether the mixed views in the diversificationperformance nexus is due to variations in productivity. The findings in both proxies of performance (q and return on asset (ROA)) show that productivity is not a significant moderator in the diversificationperformance link, except that under industrial conglomerates productivity enhances ROAs significantly. Meanwhile, the results show that diversification either has no significant value on firm performance or relates negatively with performance -a contrasting result to the hypothesis of this study. Design/methodology/approach -This study adopts diversification measurement, categorisation approach and the methodology used in the work of Fauver et al. (2004) and the subsequent modification by Lee et al. (2012). This study, however, investigates the moderating effect of productivity on diversified firms and not ownership as shown in the previous studies. Performance is measured by two proxies to show robustness of the study. ROA is an accounting tool and Tobin's q reflects a market-based performance of the firm. Findings -The results show that productivity has no moderating impact on a market-based performance of a diversified firm. Regarding ROA, results show a split in finding by showing that productivity has no significant impact on international diversification; however, for industrial diversification, results show significant impact. Originality/value -The paper adds to knowledge of finance by ruling out the view that the inconsistencies in the diversification and performance nexus in emerging economies could be due to vagaries in productivity. It is confirmed that productivity technically does not strengthen the link between diversification and performance: suggesting that factors other than productivity could establish a maximal impact on that link to minimise the inconsistencies in the findings on diversification-performance link.

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Section: Diversificationmentioning

confidence: 99%

Moderating role of productivity on diversified conglomerates and performance: the case of Malaysia

Gyan

2017

APJBA

View full text Add to dashboard Cite

show abstract

“…Therefore, the topic remains a challenge for the economic analysis of business organizations (e.g., Glaser et al, 2013;Maksimovic & Phillips, 2013, 2007Agarwal et al, 2011;Campa & Kedia, 2002;Berger & Ofek, 1995). 3 This paper examines the generic research question of whether the effect of resource plasticity on diversification relatedness matters for economic performance.…”

mentioning

confidence: 99%