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

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

Author: SALAHUDDIN RIJAL ARIFIN

Item Type : Thesis (Thesis)

Affiliations: Master of Management Science Study Program, Faculty of Economics and Business, Universitas Airlangga , Surabaya, Indonesia

Publisher: Universitas Airlangga

Abstract

Business diversification has two opposing sides. Berger and Ofek (1995) argue that there is a theoretical contradiction where diversification can increase company value and can also reduce company value. Empirical proof through research results produces conclusions that vary according to the data, methods, samples of companies, regions and research periods. The existence of theoretical contradictions and inconsistencies in empirical evidence is the background for this research. The aim of this research is to test various variations in measuring the effect of diversification as measured by the Herfindahl-Hirschman Index (HHI) and the Entropy Index on measured performance. with ROA, Tobin's Q, excess value. Apart from that, this research also aims to test the consistency between measurements. The method used in this research 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. Meanwhile, to test the consistency of results between measurements, this research uses a descriptive analysis method. The results of this research show 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/