Ownership and Control Divergence on Firm Value

Irfah Najihah Basir Malan ., Norhana Salamudin ., Noryati Ahmad .


The aim of this study is to provide an empirical evidence of the implication of pyramid firm towards firm value. Previous research have documented that in many East Asian firms, the ultimate owners showed a dispersion in actual ownership and control due to ownership concentration in pyramid firm leading to expropriation of minority shareholders’ interest. The study adapts the model by Attig using Malaysian pyramidal firms for the period 1990 to 2010. The results reveal that pyramid structure may have detrimental influence on  firm value  particularly for low cash flow right (CFR) ratio firms. Future research needs to focus on identifying the heterogeneous factors that improve the generalizability of the research.


Pyramid structure, firm value, cash flow right, control right, Attig Model, Malaysia

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