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Should PLCs diversify into related or unrelated industries? Evidence from Malaysia

The primary issue in diversification strategy is concerning its type.A large body of research on the relative effect of related versus unrelated diversification still remains inconclusive. Scholars have been studying this topic through different research designs and in different contexts, although a...

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Main Authors: Mehmood, Khawaja Khalid, Abdullah, Haim Hilman
Format: Article
Language:English
Published: Mediterranean Center of Social and Educational Research (MCSER) 2015
Subjects:
HD28 Management. Industrial Management
Online Access:http://repo.uum.edu.my/14112/1/5569-21635-1-PB.pdf
http://repo.uum.edu.my/14112/
http://doi.org/10.5901/mjss.2015.v6n1s1p517
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spelling my.uum.repo.141122016-04-17T00:05:56Z http://repo.uum.edu.my/14112/ Should PLCs diversify into related or unrelated industries? Evidence from Malaysia Mehmood, Khawaja Khalid Abdullah, Haim Hilman HD28 Management. Industrial Management The primary issue in diversification strategy is concerning its type.A large body of research on the relative effect of related versus unrelated diversification still remains inconclusive. Scholars have been studying this topic through different research designs and in different contexts, although a greater part of the research was conducted in western economies.Importantly, certain scholars have asserted that powerful conclusions could be produced if product diversification is measured using powerful techniques and performance is assessed through combination of objective and subjective measures. This research builds up on that suggestion and revisits the subject using a sample of Malaysian PLCs as Malaysia has always been characterised by proliferation of diversified companies. This is also imperative keeping in view the challenges confronted by Malaysian economy in recent years and the significant repercussions of selecting type of diversification by Malaysian corporate sector.This study was conducted for multi-business PLCs listed on Main Market of Bursa Malaysia.T-tests based on 123 diversified PLCs revealed that related diversifiers outperformed unrelated diversifiers on Tobin’s q and price/book value. The study carries significant theoretical implications along with practical implications for Malaysian corporate sector and other PLCs facing similar business scenarios as in Malaysia. Mediterranean Center of Social and Educational Research (MCSER) 2015-01 Article PeerReviewed application/pdf en cc_by http://repo.uum.edu.my/14112/1/5569-21635-1-PB.pdf Mehmood, Khawaja Khalid and Abdullah, Haim Hilman (2015) Should PLCs diversify into related or unrelated industries? Evidence from Malaysia. Mediterranean Journal of Social Sciences, 6 (1). pp. 517-528. ISSN 2039-9340 http://doi.org/10.5901/mjss.2015.v6n1s1p517 doi:10.5901/mjss.2015.v6n1s1p517
institution Universiti Utara Malaysia
building UUM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Utara Malaysia
content_source UUM Institutionali Repository
url_provider http://repo.uum.edu.my/
language English
topic HD28 Management. Industrial Management
spellingShingle HD28 Management. Industrial Management
Mehmood, Khawaja Khalid
Abdullah, Haim Hilman
Should PLCs diversify into related or unrelated industries? Evidence from Malaysia
description The primary issue in diversification strategy is concerning its type.A large body of research on the relative effect of related versus unrelated diversification still remains inconclusive. Scholars have been studying this topic through different research designs and in different contexts, although a greater part of the research was conducted in western economies.Importantly, certain scholars have asserted that powerful conclusions could be produced if product diversification is measured using powerful techniques and performance is assessed through combination of objective and subjective measures. This research builds up on that suggestion and revisits the subject using a sample of Malaysian PLCs as Malaysia has always been characterised by proliferation of diversified companies. This is also imperative keeping in view the challenges confronted by Malaysian economy in recent years and the significant repercussions of selecting type of diversification by Malaysian corporate sector.This study was conducted for multi-business PLCs listed on Main Market of Bursa Malaysia.T-tests based on 123 diversified PLCs revealed that related diversifiers outperformed unrelated diversifiers on Tobin’s q and price/book value. The study carries significant theoretical implications along with practical implications for Malaysian corporate sector and other PLCs facing similar business scenarios as in Malaysia.
format Article
author Mehmood, Khawaja Khalid
Abdullah, Haim Hilman
author_facet Mehmood, Khawaja Khalid
Abdullah, Haim Hilman
author_sort Mehmood, Khawaja Khalid
title Should PLCs diversify into related or unrelated industries? Evidence from Malaysia
title_short Should PLCs diversify into related or unrelated industries? Evidence from Malaysia
title_full Should PLCs diversify into related or unrelated industries? Evidence from Malaysia
title_fullStr Should PLCs diversify into related or unrelated industries? Evidence from Malaysia
title_full_unstemmed Should PLCs diversify into related or unrelated industries? Evidence from Malaysia
title_sort should plcs diversify into related or unrelated industries? evidence from malaysia
publisher Mediterranean Center of Social and Educational Research (MCSER)
publishDate 2015
url http://repo.uum.edu.my/14112/1/5569-21635-1-PB.pdf
http://repo.uum.edu.my/14112/
http://doi.org/10.5901/mjss.2015.v6n1s1p517
_version_ 1644281364506214400
score 13.211869

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