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1 – 10 of over 1000
Article
Publication date: 5 July 2011

Azmi Abd. Hamid

This paper aims to investigate whether or not there exists a relationship between network governance structures in GLCs and NGLCs and performance in Malaysia. In pursuing this…

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Abstract

Purpose

This paper aims to investigate whether or not there exists a relationship between network governance structures in GLCs and NGLCs and performance in Malaysia. In pursuing this objective, the study will explore whether the structures are significantly different and, if so, will seek to establish whether the relationship between their structures and performance of the two groups differs.

Design/methodology/approach

The study adopts a matched‐pair analysis between GLCs and NGLCs in terms of board listing, types of industry and paid‐up capital. All data related to variables were collected mainly from the annual reports of companies and the Bursa Malaysia websites. Besides paired sample t‐tests, univariate tests were also conducted to establish whether there is a statistically‐significant relationship between each independent variable and firm performance measured by either ROA or ROE.

Findings

The results showed that there were statistically‐significant differences for both network governance structures of senior government officers (SGO) and politicians (POL) as directors between GLCs and NGLCs for the period under study. Therefore, the first hypothesis of significant differences between the network governance structures of GLCs and NGLCs is fully supported. However, the presence and contribution of both SGO and POL to firm performance are much more noticeable in NGLCs compared to GLCs. BSZ is generally positively correlated with performance and this relationship is stronger for GLCs than NGLCs. As for RDU, no statistically‐significant relationship was found in all years. This indicates that there is no clear indication of any relationship between RDU and performance measured by ROA and ROE in all groupings of companies.

Research limitations/implications

It is impossible to get an exact pair of GLCs and NGLCs companies. However, both groups of companies have been paired as close as possible based on their paid‐up capital. The research was conducted in a period of three years only and before the transformation process of GLCs. As such, the findings might not reflect the general long‐term performance of GLCs.

Originality/value

This paper contributes to the literature as it examines the relationship between network governance variables to firm performance in the context of GLCs and NGLCs in Malaysia.

Details

Journal of Financial Reporting and Accounting, vol. 9 no. 1
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 2 November 2015

Hairul Azlan Annuar

The purpose of this paper is to ascertain whether different types of institutional investor in Malaysia are involved in the corporate governance of their investee companies, and…

Abstract

Purpose

The purpose of this paper is to ascertain whether different types of institutional investor in Malaysia are involved in the corporate governance of their investee companies, and, if yes, to what extent is the level of the involvement.

Design/methodology/approach

A qualitative approach, consisting of a series of interviews with 18 senior investment managers of different types of institutional investor, was chosen.

Findings

The findings suggest that lessons learnt from the fallout of the Asian crisis has made Malaysian institutional investors not only to be more prudent in managing their total funds and in making equities investment decisions, but has resulted in a more active participation in their “core” investee companies apart from merely discharging their voting rights. Interview analysis revealed that government-linked investment companies are championing the cause and could possibly affect the overall level of institutional investors’ involvement, which bode well for the future of the corporate governance system of the country.

Research limitations/implications

Generalisations may be an issue when interviews are used as the method of inquiry. Also, the sample is not random, as access to many managers depended on recommendations. In addition, respondents were consciously selected to obtain different types of institutional investors that included government and non-government linked.

Originality/value

There is a lack of work on studying the involvement of institutional investors in developing countries, whereby previous work and literature review were predominantly based upon the experience of Western economies.

Details

Journal of Accounting & Organizational Change, vol. 11 no. 4
Type: Research Article
ISSN: 1832-5912

Keywords

Article
Publication date: 1 April 2019

Anindita Chakrabarti and Ahindra Chakrabarti

The purpose of this paper is to determine the factors affecting the capital structure of companies engaged in the Indian energy sector.

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Abstract

Purpose

The purpose of this paper is to determine the factors affecting the capital structure of companies engaged in the Indian energy sector.

Design/methodology/approach

Capital structure theories and empirical literature have been reviewed to formulate propositions concerning the factors/variables determining the capital structure of Indian energy companies. The examination is done using panel data techniques for the sample 141 companies operating in the Indian energy sector.

Findings

The results show firms’ age, asset turnover ratio, liquidity and firms’ size to be significant determinants of capital structure for the Indian energy companies, while profitability, debt service capacity, sales growth, non-debt tax shield and tangibility ratio to be insignificant determinants. Historically, profitability has shared a significantly negative relationship with debt ratio; however, the relation here is not significant.

Research limitations/implications

The focus of the current study is on Indian energy sector, the results obtained will not be applicable for other sectors.

Originality/value

The current research gives an insight into the determinants of capital structure of the companies engaged in the Indian energy sector, which are mostly overlooked due to the laws, policies and regulations governing the sector as a whole.

Details

International Journal of Energy Sector Management, vol. 13 no. 1
Type: Research Article
ISSN: 1750-6220

Keywords

Article
Publication date: 25 June 2019

Hairul Azlan Annuar

The purpose of this paper is to ascertain whether institutional investors in Malaysia faced limitations when they are involved in the corporate governance of their investee…

Abstract

Purpose

The purpose of this paper is to ascertain whether institutional investors in Malaysia faced limitations when they are involved in the corporate governance of their investee companies.

Design/methodology/approach

A qualitative approach, consisting of a series of interviews with senior investment managers of different type of institutional investors, was chosen. In total, 18 interviews were conducted over a period of two months, which is thought to sufficiently provide the answers to the research purpose.

Findings

The interviews revealed there are difficulties in monitoring all investee companies due to lack of time and resources. Traditional measures such as company financial performance and dividend policy, continued to be favored and rigorously monitored. The overdependence on hard criteria may be a result of a culture of overly rewarding beneficiaries and a lack of expertise in being involved in specialized company areas such as strategy. Strict regulations hamper effort to be more involved in governing investee companies.

Research limitations/implications

The research used interviews and generalization may become an issue. In addition, access to many managers depended on recommendations, and the respondents are selected to represent the different types of institutional investors.

Originality/value

Investigation into factors that may limit institutional investors’ involvement in corporate governance in Malaysian public listed companies, especially from a more qualitative viewpoint, is lacking. In addition, this paper advances the understanding of shareholder activism by adding to the literature by exploring the issue in a specific emerging markets context.

Details

Social Responsibility Journal, vol. 16 no. 4
Type: Research Article
ISSN: 1747-1117

Keywords

Article
Publication date: 13 October 2020

Redhwan Aldhamari, Mohamad Naimi Mohamad Nor, Mourad Boudiab and Abdulsalam Mas'ud

This study aims to examine the association between the effectiveness of risk committee (RC) and firms’ performance in Malaysian context. It also explores whether political…

1835

Abstract

Purpose

This study aims to examine the association between the effectiveness of risk committee (RC) and firms’ performance in Malaysian context. It also explores whether political connection has an impact on the relationship.

Design/methodology/approach

This study, using a principle components analysis, derives a factor score for RC attributes to proxy the effectiveness of RC. It also uses both accounting and market performance to measure the company performance.

Findings

Using a sample of financial firms from 2004 to 2018, this study finds that both accounting and market performance are higher for firms with an effective RC. It also finds that the effectiveness of RC in monitoring and management of risks is more pronounced for politically connected firms (PCFs). In further tests, the paper finds that RC attributes (i.e. RC independence, qualification and gender) are positively and significantly associated with accounting performance, while those of RC existence and overlap are positively and significantly related to market performance. The study also finds that RC size (RC diligence) has a positive (negative) impact on financial firms accounting and market performance. The further analysis also shows that PCFs with a separate as well as larger RCs experience both higher accounting and market performance. This study’s results are robust for concerns of endogeneity.

Practical implications

The findings of this study resolve the ongoing debates surrounding political connection by suggesting financial firms not to have politically connected board members as doing so may deteriorate their performance. This study’s results are also useful for investors, regulators and policymakers.

Originality/value

To the best of the authors’ knowledge, this study, for the first time, introduces on the interaction term between the effectiveness of RCs and political connection to empirically explore how an effective RC may reduce the potential risk of political ties. As such, this study adds to the literature and sheds light on an aspect of risk (i.e. risk stems from establishing close link with the government) that is growing in importance.

Details

Corporate Governance: The International Journal of Business in Society, vol. 20 no. 7
Type: Research Article
ISSN: 1472-0701

Keywords

Article
Publication date: 4 December 2009

Foong Soon Yau, Loo Sin Chun and Rajeswary Balaraman

This study examines the extent and nature of voluntary intellectual capital (IC) disclosure by public‐listed companies in Malaysia and how the disclosure may be explained by the…

1252

Abstract

This study examines the extent and nature of voluntary intellectual capital (IC) disclosure by public‐listed companies in Malaysia and how the disclosure may be explained by the economics or other rationale of corporate disclosure. Those intangible assets that are required to be disclosed under the extant accounting standards were specifically excluded from this study. The top 30 and the bottom 30 companies were selected from the list of top 100 largest public‐listed companies by market capitalization at the end of 2003. Content analysis was used to measure the extent of voluntary IC disclosure in the 2003 annual reports of the selected companies. This study found that the voluntary disclosure of IC information is generally not extensive among the publiclisted companies in Malaysia and narrative description of their IC attributes is the most often adopted format. The findings suggest that the IC disclosure behaviour of the sample companies may be explained based on both economic and non‐economic rationale. Implications of the findings are discussed.

Details

Journal of Financial Reporting and Accounting, vol. 7 no. 1
Type: Research Article
ISSN: 1985-2517

Keywords

Article
Publication date: 29 June 2010

Nazli Anum Mohd Ghazali

Following the 1997 Asian financial crisis, the Malaysian Government introduced new regulations on corporate governance, recognizing the importance of restoring market confidence…

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Abstract

Purpose

Following the 1997 Asian financial crisis, the Malaysian Government introduced new regulations on corporate governance, recognizing the importance of restoring market confidence. The purpose of this paper is to evaluate the impact of the implementation of these new regulations on corporate performance.

Design/methodology/approach

Regression analysis was performed to examine factors influencing corporate performance. Ownership structure was represented by director ownership, foreign ownership and government ownership, and corporate governance was proxied by board size and independence. Corporate performance was measured by Tobin's Q.

Findings

Using data from the year 2001 annual reports of 87 non‐financial listed companies included in the composite index, the results showed that none of the corporate governance variables was statistically significant in explaining corporate performance. Nonetheless, two ownership variables, namely the government as a substantial shareholder and foreign ownership, were statistically significantly associated with Tobin's Q.

Research limitations/implications

The regulations on corporate governance were implemented in 2001, perhaps it was too early to analyze results for the financial year 2001 as regulatory changes may take a few years before it could be expected to show positive or intended results.

Practical implications

An implication of this finding is that regulatory efforts initiated after the 1997 financial crisis to enhance corporate transparency and accountability did not appear to result in better corporate performance.

Originality/value

This is one of the few studies which investigates the impact of regulatory actions on corporate governance on corporate performance immediately after its implementation.

Details

International Journal of Commerce and Management, vol. 20 no. 2
Type: Research Article
ISSN: 1056-9219

Keywords

Article
Publication date: 1 September 1999

Loizos Heracleous

This paper begins by describing the trends and drivers of privatisation, as well as the benefits derived from privatisation programmes. It then considers the ownership debate…

3791

Abstract

This paper begins by describing the trends and drivers of privatisation, as well as the benefits derived from privatisation programmes. It then considers the ownership debate, i.e. whether superior performance of state‐owned enterprises (SOEs) can be achieved under state ownership. While empirical work shows that private ownership is associated with superior performance, the experience of Singapore is a clear example to the contrary. Singapore Telecom is described as a case where state ownership combined with several contextual factors has led to sustained world‐class performance, in spite of global trends such as deregulation and technological advancement which create turmoil and reduce profitability in the telecommunications industry. These contextual factors include a clear corporate strategy combined with an efficiency focus by Singapore Telecom, a long‐term national policy of infrastructure improvement as a strategic resource for national economic development, and a robust economic and regulatory environment. The implications of the Singapore experience are then discussed.

Details

International Journal of Public Sector Management, vol. 12 no. 5
Type: Research Article
ISSN: 0951-3558

Keywords

Article
Publication date: 30 August 2021

Osama F. Atayah, Khakan Najaf, Ravichandran K. Subramaniam and Phaik Nie Chin

This study aims to investigate the implication of top executives’ number of years of experience (tenure) on corporate risk-taking behaviour and corporate performance in Malaysian…

Abstract

Purpose

This study aims to investigate the implication of top executives’ number of years of experience (tenure) on corporate risk-taking behaviour and corporate performance in Malaysian corporations.

Design/methodology/approach

To test the hypothesis efficiently, the authors have extracted the data from Bloomberg for 788 listed companies of the Malaysian Stock Exchange. The methodology entails ordinary least squares regressions, quantile regression and dynamic system generalized method of moments model.

Findings

First, the authors show that executive management tenure has a significant negative relationship with corporate risk-taking. It means that the long-tenured executives tend to undertake less risky strategies and decisions. Second, this study reveals that the longer executive management tenure has a positive relationship with corporate performance. Third, the moderating effect of corporate risk-taking with executive tenure (Tenure dummy*Risk) has a negative relationship with the corporate performance by 1%.

Practical implications

It implies that the appointment of experienced executive management contributes towards corporate performance directly. However, experienced management trends take less risk, which eventually results in mitigating the corporate performance. On that basis, the findings are significant in highlighting the usefulness of executive leadership term and offers insights to academics, practitioners and policymakers.

Originality/value

This paper is novel since it is unique in evaluating the executive tenure and the preferences to handle risk strategies and how that impact the firm performance.

Details

Asia-Pacific Journal of Business Administration, vol. 14 no. 1
Type: Research Article
ISSN: 1757-4323

Keywords

Open Access
Article
Publication date: 28 November 2023

ABM Fazle Rahi, Jeaneth Johansson and Catherine Lions

This study aims to examine the factors that influence the relationship between sustainability and financial performance (FP) of the European listed companies.

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Abstract

Purpose

This study aims to examine the factors that influence the relationship between sustainability and financial performance (FP) of the European listed companies.

Design/methodology/approach

This study analyzed data from 795 companies in 21 European countries by applying linear mixed-effects multilevel regressions, a two steps system generalized method of moments and quantile regression models to uncover the links between sustainability and FP.

Findings

The past four decades have witnessed abundant research to determine the relationship between corporate sustainability and FP. Thus, conducting further research in 2023 could be seen as “reinventing the wheel.” Yet, earlier research considered firms as isolated entities with sustainability and FP being dependent only on that firm’s actions. By contrast, with the help of network governance theory, this study shows that a firm’s sustainability and FP depend on an interplay among interorganizational actors, such as institutional qualities, macroeconomic factors and an embrace of sustainability. Here, large firms play an essential role. Three significant findings are drawn. First, sustainability performance has a significant impact on FP in the European context. Second, the institutional quality (IQ) of the rule of law and control of corruption plays a crucial role in enhancing sustainability and FP, and finally the interaction of IQ and economic growth helps to increase companies’ market value (Tobin’s Q). The consistent and empirically robust findings offer key lessons to policymakers and practitioners on the interplay among multiple actors in corporate sustainability and FP.

Practical implications

A synergetic multifaced relationship between governmental institutions and corporations is inevitable for ensuring sustainable development. The degree of intimacy in the relationship, of course, will be determined by the macroeconomic environment.

Originality/value

In this research, this study theoretically and empirically identified that corporate sustainability and FP are not solely dependent on corporate operation. Rather, it is transformed, modified and shaped through an interaction of multiple actors’ trajectories in the macro business environment.

Details

International Journal of Accounting & Information Management, vol. 32 no. 1
Type: Research Article
ISSN: 1834-7649

Keywords

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