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1 – 7 of 7Sam Sarpong and Ali Saleh Alarussi
The paper focuses on Malaysia's huge waste challenges and how circular economy practices can turn that into increased and sustained economic growth.
Abstract
Purpose
The paper focuses on Malaysia's huge waste challenges and how circular economy practices can turn that into increased and sustained economic growth.
Design/methodology/approach
Published official reports on the country's sustainable development initiatives, policy statements from local authorities and government agencies as well as UN bodies and other secondary materials were sourced for this article.
Findings
The paper finds that Malaysia's waste can be used in generating wealth for the country if and when a conscious effort is made towards establishing a sound circular economy in the country. It also sees enormous opportunities that exist for cooperative models of social enterprises and business innovations.
Originality/value
The paper details the numerous policies and initiatives that the Malaysian government has embarked upon in recent times and scrutinises them to decipher the direction of country's bid for sustainable development. It also carries details of what can be done to achieve circularity as well as the benefits that can accrue from that.
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Ali Saleh Alarussi and Xiaoyu Gao
This study is conducted to determine the factors that affect profitability in Chinese listed companies (by using financial ratios). Four independent variables liquidity…
Abstract
Purpose
This study is conducted to determine the factors that affect profitability in Chinese listed companies (by using financial ratios). Four independent variables liquidity, intangible assets, working capital and company leverage were empirically tested for their relationships with profitability besides two control variables which are firm size and company efficiency.
Design/methodology/approach
This study used secondary data extracted manually from the annual reports of non-financial Chinese listed companies on the Shanghai stock exchange (http://www.szse.cn/); the data set covers 100 companies during the period of 2017–2019, and a random selection method was used in order to achieve credibility and fairness as much as possible.
Findings
The findings show firm size, working capital and intangible assets have positive and significant relationships with profitability [return on assets (ROA) and earnings per share (EPS)]. Positive working capital is important to lower the cost of capital and improve companies' profitability. Intangible assets are also an essential source to improve profitability due to their low costs. In addition, the findings display a negative and strong relationship between liquidity and profitability, meaning that companies suffer low profit due to inefficient use of liquid items. Interestingly, leverage, which is measured by debt ratio and leverage ratio, shows mixed results; debt ratio shows a positive and strong association with ROA but not with EPS; while leverage ratio displays a strong but negative association with ROA but not with EPS. These results confirm the inverted U-shape relationship between leverage and profitability, which depends on the balance between benefit and cost of debt.
Social implications
Profitability is also important for employees and society where business organization provides sustainability and stability for both of them. Employees can then significantly contribute to achieve higher firm's profitability by efficiently using firm's resources.
Originality/value
This study differs than previous studies in number of aspects: First, this study focuses on financial ratios to explain profitability in Chinese companies. This study provides empirical results about the factors connected to profitability and help stakeholders to make their right decisions. Second, it examines the impact of four independent factors and two control variables that some of them are new in Chinese context such as intangible assets. Third previous studies focus on financial industry such as banks; however, this study focuses on non-financial industry.
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Ali Saleh Alarussi and Sami Mohammed Alhaderi
The purpose of this paper is to examine the factors affecting profitability in Malaysian-listed companies. It has been argued that profitability is the main pillar for any company…
Abstract
Purpose
The purpose of this paper is to examine the factors affecting profitability in Malaysian-listed companies. It has been argued that profitability is the main pillar for any company to survive in the long run. Although profitability is the primary goal of all business ventures, scant attention has been paid to the factors that affect profitability in developing countries. This study investigates the factors affecting profitability in Malaysian-listed companies.
Design/methodology/approach
This research is based on five independent variables that were empirically examined for their relationship with profitability. These variables are: firm size (as measured by total sales), working capital (WC), company efficiency (assets turnover ratio), liquidity (current ratio) and leverage (debt equity ratio and leverage ratio). Data of 120 companies listed on Bursa Malaysia covering the period from 2012 to 2014 were extracted from companies’ annual reports. Pooled ordinary least squares regression and fixed-effects were used to analyze the data.
Findings
The findings show a strong positive relationship between firm size (total sales), WC, company efficiency (assets turnover ratio) and profitability. The results also show a negative relationship between both debt equity ratio and leverage ratio and profitability. Liquidity (current ratio) has no significant relationship with profitability.
Research limitations/implications
Due to the time limitation, the data includes only 120 companies listed in bursa Malaysia and covers the period from 2012 to 2014.
Practical implications
These results benefit internal users (such as mangers, shareholders and employees). They can realize the determinants of enhancing the profitability of their company after the depreciation of the Malaysian currency and therefore concentrate more on the factors that enhance their companies’ profitability. On the other side, other external users (such as investors, creditors, new established companies, tax authority) also may get advantages of these results. It is clear that those users concern about the profitability of companies and the determinants of their profitability after the currency’s depreciation.
Originality/value
This study differs than previous studies in many ways: first, it focuses on non-financial listed companies in Malaysia. Previous studies have concentrated on companies in the financial sector, such as banking and financial institutions or on industrial organizations. Second, this study analyzes the data in companies’ annual reports for a three-year period from 2012 to 2014. During this period, the economy in Malaysia was fluctuating due to currency depreciation. Third, the study used both return on equity and earnings per share as indicators of profitability. Fourth, the results of the study provide empirical evidence that large size firms with efficiently managed assets can improve operating income and ultimately enhance profitability. Last but not least, this study applies the resource-based theory and the trade-off theory.
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This paper examines the financial ratios that may have a significant effect on the efficiency in Malaysian listed companies. Nine financial ratios measure seven variables which…
Abstract
Purpose
This paper examines the financial ratios that may have a significant effect on the efficiency in Malaysian listed companies. Nine financial ratios measure seven variables which are firm visibility, tangibility, working capital, leverage, liquidity, productivity and profitability.
Design/methodology/approach
Data are collected from 108 public listed companies in Malaysia. The data extracted from companies' annual reports for three years 2012–2014. STATA software analysis is used to examine these relationships.
Findings
The results show each of tangibility and liquidity have negative relationships with efficiency ratio. In against of that, profitability, working capital and productively positively link to efficiency. Leverage which is measured by two ratios – Debt ratio and Debt equity ratio – shows mix results. Debt ratio shows a positive but not significant relationship with efficiency ratio and Debt equity ratio shows a negative significant relationship with efficiency ratio.
Practical implications
The results benefit companies, investors, economists and governments regulators in Malaysia-to understand the efficiency determinants, so help to make the right decision to enhance the efficiency level in companies which leads to enhance the amount of investments which in turn, enhance the country's economy in general.
Originality/value
This study differs than previous studies number of aspects: first the study covers a three years' period between 2012 and 2014, this period presents the movement of Malaysian current into depreciation with more than 45 percent of its value. Second, in the Malaysia context, this study examines new variables such as firm visibility, tangibility, and productivity. Third, the results of this study will help managers, shareholders, investors, regulators and other parties to make right decisions that will enhance the level of firm efficiency which enhances the investments and the economy of Malaysia.
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The purpose of this study is to investigate the impact of audit committee characteristics on firm performance. In particular, the authors employ the random-effects variant of the…
Abstract
Purpose
The purpose of this study is to investigate the impact of audit committee characteristics on firm performance. In particular, the authors employ the random-effects variant of the Hunter–Schmidt meta-analyze procedure to analyze the effects of key audit committee attributes, namely audit committee independence, audit committee expertise, audit committee size, audit committee meeting along with big four impact on firm performance. The authors hope to gain a better understanding of the function of audit committees in enhancing firm performance and to uncover potential discrepancies in prior findings due to varying economic levels or performance metrics.
Design/methodology/approach
This study uses the Hunter–Schmidt method to conduct a meta-analysis of 39 previous studies published between 2012 and 2022 to investigate the relationship between audit committee characteristics and firm performance.
Findings
The results indicate that audit committee independence, expertise, size and affiliation with the big four have a significant and positive effect on firm performance, while audit committee meetings have a non-significant effect. Furthermore, findings suggest that companies should carefully consider the contextual factors that may impact the effectiveness of their corporate governance structures, such as economic level, when designing and implementing governance mechanisms.
Originality/value
This study is significant as it is the first to combine and analyze previous research on this topic and highlights the importance of certain audit committee characteristics in enhancing financial reporting quality and corporate governance.
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Muhammad Ayaz, Shafie Mohamed Zabri and Kamilah Ahmad
The purpose of this study is to examine the relationships between leverage and firm’s performance in Malaysia by framing the relationship under the tradeoff theory and agency cost…
Abstract
Purpose
The purpose of this study is to examine the relationships between leverage and firm’s performance in Malaysia by framing the relationship under the tradeoff theory and agency cost theory.
Design/methodology/approach
Based on insights drawn from the existing literature, we opted for fixed effects and system two-steps GMM models to establish the hypothesized relationship between leverage and performance. We analyzed 528 nonfinancial firms listed on the Bursa Malaysia Stock exchange for the period of 12 years (2005–2016).
Findings
The outcomes show that the leverage ratio improves the firm performance, consistent with leverage serving as an effective strategy in constraining managers from building their personal empire, revealing a proportionately greater benefit for Malaysian firms than the cost to debt financing. The authors also find that a positive relationship between leverage and firm performance switch to the negative when the level of leverage reaches beyond the optimal level. Consequently, switching from positive to negative indicates that debt has a twofold (nonlinear) impact on firm performance.
Practical implications
Our research provides several implications to potential stakeholders. For investors, firms having lower leverage ratios could achieve superior performance, thus investing in corporations pursuing higher performance. Managers should therefore strive for achieving higher performance to meet the needs of investors and shareholders. From the researcher’s perspective, our research suggests the need to go away from the searching linear association between leverage and firm performance and the relevance of nonlinear correlation. Moreover, our research can help managers to understand how their lender relates to their debt to assets ratios. Thus, they can design an optimal level of leverage that not only improves the firm’s performance but also reduce the associated costs.
Originality/value
To the best of the author’s knowledge, this is the initial attempt in the context of Malaysia that documents evidence indicating that the lower leverage is likely to create value for shareholders while a higher debt ratio reduces firm profitability.
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Amina Buallay, Jasim Yusuf AlAjmi, Sayed Fadhul and Aikaterini Papoutsi
This study investigates the association between corporate sustainability disclosures and firm performance and value.
Abstract
Purpose
This study investigates the association between corporate sustainability disclosures and firm performance and value.
Design/methodology/approach
This study collected data from 694 manufacturing companies operating in 34 countries between 2007 and 2019, yielding 6,181 firm-year observations. This study employs a dual-model framework to analyze the influence of environmental, social, and governance (ESG) performance on return on assets (ROA), return on equity (ROE), and Tobin's Q ratio. Two sets of control variables, firm- and country-specific, were incorporated to account for potential confounding factors. To validate the robustness of the findings, we utilized a battery of econometric techniques, including traditional ordinary least squares (OLS), firm-fixed effects, quantile regression, and instrumental variables-generalized method of moments (IV-GMM), applied to both the pooled and firm-fixed effects models.
Findings
The findings are contradictory: there is a negative relationship between sustainability disclosure and operating performance and return on equity, but a positive relationship between sustainability disclosure and firm value. The negative correlation is consistent with agency theory and the positive correlation is consistent with the legitimacy and shareholder theories. These results are robust to performance measures and estimation methods.
Research limitations/implications
Short-term profit shouldn't deter sustainability. It boosts legitimacy, reputation, efficiency, and long-term market value. Investors must look beyond profitability ratios, embracing ESG metrics. Firms should see sustainability as strategic investment, not cost. Patience pays off: long-term gains await. Regulation can guide balanced growth, prioritizing both shareholders and societal well-being.
Originality/value
This study is the first to adopt a firm’s fixed-effect quantile regression, which provides deep insights into the role of sustainability disclosure in meeting stakeholders’ expectations.
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