To read this content please select one of the options below:

Corporate governance, risky business and construction industry: a divergence between Bursa and Construction Industry Development Board (CIDB) Klang Valley, Malaysia

Malik Hussain (Universiti Kuala Lumpur, Kuala Lumpur, Malaysia)
Abdul Hadi (Universiti Kuala Lumpur, Kuala Lumpur, Malaysia)

Corporate Governance

ISSN: 1472-0701

Article publication date: 16 May 2019

Issue publication date: 3 June 2019

1011

Abstract

Purpose

This study aims to examine the association between corporate governance mechanism and firm performance measured by return on assets (ROA). The question is whether an effective corporate governance mechanism is able to increase the firm performance of Bursa and Construction Industry Development Board (CIDB) Klang Valley, Malaysia. The main purpose of this study is the in-depth analysis of the corporate governance mechanism and construction industry Malaysia via Bursa and CIDB.

Design/methodology/approach

Following the primary and secondary data comparative approach, data are collected from 46 listed construction companies and 250 CIDB-registered SMEs for the financial year 2015. Descriptive statistics, Pearson correlation test are reported, and model estimation is performed using logistic regression.

Findings

The empirical outcome shows that the corporate governance mechanism is significant in case of the CIDB Malaysia-registered SMEs. While, it has insignificant impact on firm’s performance for Bursa Malaysia.

Practical implications

This paper offers evidence specifically for Bursa and CIDB Malaysia construction industry. It can also provide guidance to the board of directors for the subscription of shares under the corporate governance measures at Bursa Malaysia. The findings also suggest that CIDB should increase awareness regarding institutional investment to assist the securities market to develop further.

Originality/value

This study gives an indication about corporate governance, specifically for the CIDB-registered SMEs and Bursa Malaysia. It also discusses the matter of firm performance under the light of corporate governance.

Keywords

Citation

Hussain, M. and Hadi, A. (2019), "Corporate governance, risky business and construction industry: a divergence between Bursa and Construction Industry Development Board (CIDB) Klang Valley, Malaysia", Corporate Governance, Vol. 19 No. 3, pp. 438-457. https://doi.org/10.1108/CG-03-2018-0107

Publisher

:

Emerald Publishing Limited

Copyright © 2019, Emerald Publishing Limited

Related articles