CONSISTENCY EFFECT OF BUSINESS DIVERSIFICATION ON COMPANY PERFORMANCE IN MANUFACTURING COMPANIES IN INDONESIA

Amount: CONSISTENCY EFFECT OF BUSINESS DIVERSIFICATION ON COMPANY PERFORMANCE IN MANUFACTURING COMPANIES IN INDONESIA

Author: SALAHUDDIN RIJAL ARIFIN

Item Type: Thesis

Memberships: Master of Management Science Study Program, Faculty of Economics and Business, Airlangga University, Surabaya, Indonesia

Publisher: Airlangga University

Abstract

Business diversification has two opposing sides. Berger and Ofek (1995) argue that there is a theoretical contradiction where diversification can increase firm value and can also decrease firm value. Empirical evidence through research results results in conclusions that vary according to data, methods, sample company, region, and research period. The existence of theoretical contradictions and inconsistency of empirical evidence is the background of this study. The purpose of this study is to examine various variations in the measurement of the effect of diversification as measured by the Herfindahl-Hirschman Index (HHI) and the Entropy Index on the measured performance. with ROA, Tobin's Q, excess value. In addition, this study also aims to test the consistency between the measurements. The method used in this study is linear regression to reveal the effect of diversification as measured by the Herfindahl-Hirschman Index (HHI) and Entropy Index on performance as measured by ROA and Tobin's Q, excess value. As for testing the consistency of the results between measurements, this study uses descriptive analysis method. The results of this study indicate that in general there is consistency in measuring the effect of diversification on performance in manufacturing companies in Indonesia.

Keywords : diversification, company performance, measurement consistency

sources: http://repository.unair.ac.id/74958/