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Article
Publication date: 13 October 2020

Rayenda Khresna Brahmana, Hui-Wei You and Xhin-Rong Yong

This study aims to examine the moderating role of chief executive officer (CEO) power on the relationship between divestiture strategy and firm performance by framing the…

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Abstract

Purpose

This study aims to examine the moderating role of chief executive officer (CEO) power on the relationship between divestiture strategy and firm performance by framing the relationship under the agency and power circulation theories.

Design/methodology/approach

This study focuses on a sample of 319 non-financial public-listed companies in Malaysia from the year 2012–2016 and estimates the model under two-step generalized method of moments panel regression to eliminate the endogeneity issue.

Findings

The results show that divestiture strategy decreased the firm performance. Meanwhile, greater CEO power changed that divestiture effect but still failed to increase the performance. This study also indicates the CEO power strengthens the relationship between firm performance and divestiture.

Research limitations/implications

The overall findings show that the positive moderating role of CEO power on the relationship between divestiture and performance. This research confirmed the agency and power circulation theories by showing that CEO power can make divestiture strategy works. However, the moderating plot tells different. CEO power may strengthen the relationship between divestiture and performance; it fails to boost up the performance in overall. Therefore, this study is about CEO power on the strategic decision and gives a good implication for corporate governance concerning the impact of CEO power on the organization’s alignment process.

Originality/value

This study examines the effect of CEO power on the performance of divestiture strategy implementation by contesting the agency and power circulation theories within an emerging country context.

Details

Management Research Review, vol. 44 no. 3
Type: Research Article
ISSN: 2040-8269

Keywords

Article
Publication date: 24 December 2024

Rayenda Khresna Brahmana, Maria Kontesa and Doddy Setiawan

This study aims to investigate the impact of product market competition on the relationship between firm digital transformation and international diversification. It aims to…

Abstract

Purpose

This study aims to investigate the impact of product market competition on the relationship between firm digital transformation and international diversification. It aims to uncover how competition moderates this relationship and to reveal the nonlinear dynamics between digital transformation and international diversification in strategic decision-making processes.

Design/methodology/approach

Using a panel logistic regression analysis, this study examines data from 235 Malaysian nonfinancial listed companies from 2012 to 2019. The analysis focuses on the manufacturing and technology industries due to the availability of digital transformation data, leading to a data set of 1,180 year-firm observations.

Findings

The results reveal a nonlinear relationship between digital transformation and international diversification, intensified by product market competition. Initially, digital transformation positively affects international diversification, but this effect turns negative as competition increases. Robustness checks validate these findings, indicating that competition’s impact varies with the level of digital transformation.

Research limitations/implications

This study’s findings are based on text analysis as a proxy for digital transformation, which may not fully capture organizational changes. Future research could use reported transformation costs or mandatory disclosures. In addition, this study focuses solely on international diversification, excluding other forms of diversification and financial constraints.

Practical implications

Policymakers should recognize that high product market competition can negate the benefits of digital transformation on internationalization. They need to balance promoting digital transformation with addressing competitive challenges. Managers should analyze the competitive landscape before pursuing international expansion, as high competition can diminish the advantages of digital transformation.

Originality/value

This research enriches agency and resource-based view theories by revealing the complex dynamics between digital transformation, competition and international diversification. It introduces a parabolic relationship between competition and diversification, challenging traditional assumptions and providing a comprehensive framework for understanding strategic decisions in competitive environments.

Details

Critical Perspectives on International Business, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1742-2043

Keywords

Article
Publication date: 17 March 2023

Hui Wei You and Rayenda Khresna Brahmana

This research aims to examine the moderating role of digital orientation (DO) on the relationship between innovation and internationalization by framing the relationship under an…

Abstract

Purpose

This research aims to examine the moderating role of digital orientation (DO) on the relationship between innovation and internationalization by framing the relationship under an agency, resource-based view (RBV) and organization orientation (OO) theory.

Design/methodology/approach

This study focuses on a sample of 392 listed companies in Malaysia from 2011 to 2018 and estimates the model under the double clustered regression, dynamic GMM panel model and one-lagged model to tackle endogeneity and reversal causality. This study also did a logit model as an additional robustness check.

Findings

The findings support the RBV perspective: Companies with intensive innovation have high internationalization. However, the findings refute OO theory by revealing the evidence that DO leads to low internationalization. Supplemental analysis suggests that innovation impact on internationalization occurs in assets and sales internationalization (exports).

Research limitations/implications

According to the RBV theory, innovation is strategic value creation for the organization to achieve competitiveness. A company can expand its market internationally when the business process is more productive and efficient due to innovation. The innovation process is closely related to DO. Hence, this research explores whether DO may strengthen the effect of innovation on the internationalization process.

Originality/value

This study examines the effect of DO on innovation and internationalization implementation by contesting agency theory, RBV theory and OO theory within an emerging country context.

Details

International Journal of Emerging Markets, vol. 19 no. 12
Type: Research Article
ISSN: 1746-8809

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Article
Publication date: 27 July 2018

Lik Jing Ung, Rayenda Khresna Brahmana and Chin-Hong Puah

The purpose of this paper is to investigate whether real estate companies manipulate their earnings through the brokerage fee across ownership expropriation or not.

Abstract

Purpose

The purpose of this paper is to investigate whether real estate companies manipulate their earnings through the brokerage fee across ownership expropriation or not.

Design/methodology/approach

This study considers Kuala Lumpur Stock Exchange listed real estate firms to investigate how the brokerage fee in the real estate industry might affect the earnings management of firms across its ownership expropriation. Using annual report data, the authors investigate the associations over a panel for the period 2008−2012. Robust panel regression is used to divulge the probability values with reference by probit regression.

Findings

Overall, the results show that high brokerage fees would drive more events of earnings management and that, generally, the ownership concentration among Malaysian real estate firms significantly affects the earnings management of the firms.

Practical implications

This study shows that firm profitability and brokerage fees enhance the probability of firm’s earnings management. A low brokerage fee would reflect low revenue to the company. Therefore, management would opt to manipulate earnings in order to overstate earnings, which garners more interest from investors.

Originality/value

Real estate values in Malaysia have climbed steadily over the years due to a combination of reasons giving companies a higher brokerage fee. Earnings management has become a big issue for property investors. The study demonstrates the relationship between earnings management and brokerage fee across ownership expropriation which can be considered by shareholders in their own strategic planning and investors in their own investing.

Details

Property Management, vol. 36 no. 4
Type: Research Article
ISSN: 0263-7472

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Article
Publication date: 8 July 2019

Rayenda Khresna Brahmana, Doddy Setiawan and Chee Wooi Hooy

The purpose of this paper is to investigate whether the presence of controlling shareholder affects the value of diversification based on Indonesian listed firms. It further…

Abstract

Purpose

The purpose of this paper is to investigate whether the presence of controlling shareholder affects the value of diversification based on Indonesian listed firms. It further examines whether the degree of controlling ownership and the types of controlling ownership matter.

Design/methodology/approach

Panel data were used over the period 2006-2010 with dynamic generalised method-of-moments estimations and it defined diversification as industrial diversification, international diversification or diversification in both. A few different thresholds for the control rights of the largest shareholder are also set.

Findings

The results show that industrial diversification improves firm value but international diversification does not, while diversified in both strategies discounted firm value. The presence of a controlling shareholder is found to have a significant diversification discount, and the effect is nonlinear, where the entrenchment effect occurs around 20 to60 per cent threshold of controlling across all types of diversified firms. Last, foreign firms are found to enjoy more value from industrial diversification, but it takes an adverse turn when these involve both diversification strategies. Government firms do not seem to be different from family firms.

Research limitations/implications

The study shows the need to differentiate diversification strategies and account for non-linearity and ownership identity in modelling diversification value. Also, the degree of shareholders’ control can be a significant channel to address the agency issue on diversification value.

Practical implications

Under the backdrop of unique Indonesian corporate ownership, the presence of controlling owners is shown, and their ownership affects the value of diversification. The entrenchment effect however appears only at a certain range of ownership. This is a crucial guide for the shareholders to ensure an appropriate monitoring system is installed to maximize the shareholder’s value, especially in family firms.

Originality/value

The value of this paper is twofold. At first, the first empirical evidence on the diversification debate with Indonesian firms for its unique institutional setting is presented. Second, the standard modelling framework to investigate the types of ownership on diversification value is extended, which has rarely been covered in previous investigations.

Details

Journal of Asia Business Studies, vol. 13 no. 3
Type: Research Article
ISSN: 1558-7894

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Article
Publication date: 26 July 2023

Rayenda Khresna Brahmana and Maria Kontesa

This paper examines the impact of sharia-compliant debt financing on stock price crash risk. Unlike those previous studies that took Sukuk or sharia-compliant firms, this study…

Abstract

Purpose

This paper examines the impact of sharia-compliant debt financing on stock price crash risk. Unlike those previous studies that took Sukuk or sharia-compliant firms, this study tests the impact of the proportion reported sharia-compliant debt financing in the balance sheet on the risk of price crash of a firm.

Design/methodology/approach

Using the data from 2,752 firm-year observations of 344 Malaysian non-financial listed companies from 2012 to 2019, this article used a robust panel data estimation technique for statistical inferences. This study also employs panel GMM and quantile least squares as the robustness check.

Findings

This study established a negative relationship between sharia-compliant debt financing and stock price crash risk. The robustness checks with different estimation techniques confirm the results. It implies that firms with a more significant proportion of Sharia-compliant financing tend to have lower future stock price crash risk.

Practical implications

Consistent with the Islamic finance literature, the present study contributes to the existing literature on Islamic capital markets from the perspective of stock price crash risk because it is vital for risk management and investment decision-making as a measure of tail risk for stocks. The findings of this research will assist investors in developing portfolio strategies that incorporate firms with higher levels of sharia-compliant debt financing in their balance sheets. Additionally, the results of this study suggest that policymakers and regulatory bodies should consider revising their monitoring approaches for publicly listed firms.

Originality/value

This study is interesting and unique, as it is a pioneer in testing the impact of sharia-compliant debt financing on reducing stock price crash risk.

Details

Managerial Finance, vol. 50 no. 3
Type: Research Article
ISSN: 0307-4358

Keywords

Article
Publication date: 17 April 2024

Maria Kontesa, Rayenda Khresna Brahmana and Hui Wei You

The research objective starts from the argument that small-scale multinational corporations’ (SMNCs’) managerial behavior toward auditing decisions is influenced by their personal…

Abstract

Purpose

The research objective starts from the argument that small-scale multinational corporations’ (SMNCs’) managerial behavior toward auditing decisions is influenced by their personal value, especially when the auditing process is not mandatory. This study aims to examine how national culture-religiosity affects that decision. The authors further examine how foreign-owned MNCs might behave differently from local MNCs, although the host country’s cultural-religiosity value might influence that decision.

Design/methodology/approach

This study obtains the data from three sources: Hofstede Framework, Pew Research Center and World Bank Enterprise Survey in cross-sectional mode. The final sample consists of 8,590 SMNCs from 45 countries as the observations. This study uses robust regression analysis to test the effects of culture, religiosity and controlling shareholders on the audited financial statements decision.

Findings

The regression results support the hypothesis, whereas cultural-religiosity values are associated with the audited financial report. The findings confirm stakeholder theory and institutional theory.

Originality/value

This study fills a gap in the literature by providing empirical evidence on the cultural and religiosity effects on the accounting decision of SMNCs. The results can be used as the foundation for future research related to MNCs’ managerial behavior toward accounting policies, especially with the psychosocial factors.

Details

Pacific Accounting Review, vol. 36 no. 2
Type: Research Article
ISSN: 0114-0582

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Article
Publication date: 3 October 2016

Liang-Mui Tay, Chin-Hong Puah, Rayenda Khresna Brahmana and Nurul Izza Abdul Malek

The purpose of this paper is to investigate the connection between ethics and profitability by examining the association between published reports on white-collar crime and the…

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Abstract

Purpose

The purpose of this paper is to investigate the connection between ethics and profitability by examining the association between published reports on white-collar crime and the share-price performance of the Malaysian-listed companies. This study aims to examine the role of white-collar crime in Malaysian-listed companies on its stock-price reaction.

Design/methodology/approach

Following prior research, even study methodology is used to exploit the stock-price reaction on the white-collar crime announcement. The daily bases of average abnormal returns (AARs) and cumulative average abnormal returns (CAARs) with an event window of 90 days prior to and after the announcements are determined. This study uses public announcement data of white-collar crimes from Malaysian Securities Commission from 1996 to 2013.

Findings

The finding indicates that an announcement of a white-collar crime has a negative abnormal return on the share price. As a result, the market does not react efficiently toward the information released regarding the incidence of a white-collar crime.

Practical implications

This study contributes to the managerial decision theory, where managers should be able to see a definite connection between unethical behavior and their firm’s stock. The stockholders and policymakers should find this information important in pressing for greater corporate and managerial accountability.

Originality/value

Unlike prior research, this paper investigates the stock-price performance due to white-collar crime announcement in the Malaysian context by using complete data set of announcement from 1996 to 2013.

Details

Journal of Financial Crime, vol. 23 no. 4
Type: Research Article
ISSN: 1359-0790

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Article
Publication date: 22 April 2022

Rayenda Khresna Brahmana, Doddy Setiawan and Irwan Trinugroho

This paper examines the effect of lockdown on a firm's financial performance. The authors aim to fill in the debate over the corporate world's repercussions from governments'…

Abstract

Purpose

This paper examines the effect of lockdown on a firm's financial performance. The authors aim to fill in the debate over the corporate world's repercussions from governments' COVID-19 response. Therefore, it is imperative to understand what effect the lockdown policy has on firm financial performance.

Design/methodology/approach

The study data are cross-sectional, covering a sample of 246 listed firms in Indonesia. The lockdown policy and period data were retrieved from the Indonesian Ministry of Health COVID-19 special task force website. The authors’ empirical model for performance specification is based on annual data, following a common performance function in economics and finance literature. In addition to controlling for the standard error and province effect, the authors also controlled the COVID-19 cases and the province effect.

Findings

The lockdown deteriorates the firm's profitability, but it is not up to making the firms at financial distress level. Simply put, lockdown erodes the profitability significantly, leading to declining performance; however, it does not mean the firms generate default.

Research limitations/implications

Several shortcomings in the authors’ empirical setup need to be tackled for future research. For example, the study findings may limit the short-run effect but not the long-run effect (5–10 years after the pandemic). The findings also do not give room to justify that lockdown should not be imposed due to its deteriorating effect on the corporate world. Therefore, the authors leave this as a scope for future research.

Originality/value

This research is among the pioneer papers evaluating the effect of the government policy for mitigating the repercussions of COVID-19, and it reveals how this policy affects corporations.

Details

Asia-Pacific Journal of Business Administration, vol. 15 no. 2
Type: Research Article
ISSN: 1757-4323

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Article
Publication date: 17 January 2025

Rayenda Khresna Brahmana and Josephine Tan-Hwang Yau

Interest in using popular movies in higher education has flourished, but determining their actual impact remains tricky. Some studies suggest these movies can positively affect…

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Abstract

Purpose

Interest in using popular movies in higher education has flourished, but determining their actual impact remains tricky. Some studies suggest these movies can positively affect student satisfaction, yet many criticize this method as ineffective or lazy. Our study compared two ways of using popular movies – watching them in class versus a flipped approach – for an advanced finance module. We aim to examine the best teaching delivery of watching popular movies in an advanced module.

Design/methodology/approach

This study compares two teaching methods during movie screenings: a didactic flipped classroom (Group 01) and in-class viewing (Group 02). The sampling frame was final-year finance students from a public university. It was conducted over two academic years and involved 190 students aged 20–23. These students were split into two groups: G01, with 93 students, and G02, with 97 students. The study focused on the movie “Big Short,” chosen for its relevance to the Fixed-Income Securities course (the advanced module).

Findings

Our findings indicate both methods led to high student satisfaction, with no significant difference between in-class viewing and the flipped approach. However, the understanding of the advanced module significantly increased overall. Importantly, using popular movies as flipped material resulted in better student grades compared to in-class viewing. This suggests that while using popular movies is a beneficial teaching method, employing a didactic flipped classroom approach yields superior outcomes for students.

Practical implications

This research offers practical insights for instructors, highlighting the value of utilizing popular movies in advanced education. It suggests incorporating movies as learning materials can enhance student satisfaction, particularly when employed within a flipped classroom framework. Importantly, the study reveals that adopting the flipped classroom approach yields superior academic outcomes compared to traditional in-class viewing. Thus, instructors teaching advanced modules should consider integrating popular movies within flipped classrooms to not only enhance student satisfaction but also improve academic performance.

Originality/value

Our research investigates popular movies' efficacy, particularly in advanced finance education. While previous studies have explored using movies to enhance student satisfaction, this study investigates it further by comparing two delivery methods: the didactic flipped classroom and traditional in-class viewing. While both methods effectively increase student satisfaction, the didactic flipped classroom significantly improves academic performance. This highlights the innovative potential of the flipped approach in promoting deeper learning and suggests practical implications for instructors seeking to enhance both satisfaction and academic outcomes in advanced courses.

Details

Higher Education, Skills and Work-Based Learning, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 2042-3896

Keywords

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