Business Administration and Business Economics

Noryati Ahmad · Wan Evva Wan Suriea · Ummu Naziha Mohd Ariffin ·Malaysian Journal of Consumer and Family Economics ·2019

In Malaysia, the insurance industry is operated by conventional insurance companies and Islamic insurance companies (or better known as Takaful.). Even though the nature of business of these two types of companies is almost similar however at operational and investment level, Islamic insurance companies must be in tune with the Shariah principles. Policyholders, investors and regulators are interested in the performance of these companies. Hence, this study aims to investigate the determinants of investment performance of Islamic and conventional insurance companies in Malaysia. Company-specific factors (company size, solvency margin and liquidity) and macro factors (GDP, interest and profit rates, equity returns and inflation) are independent variables employed in the study. A panel regression was estimated on 11 Islamic and 14 conventional insurance companies in Malaysia from the year 2006 to 2015. Interestingly empirical findings revealed that only liquidity and lagged GDP statistically significant relationship with the investment performance of Islamic insurance companies. On the other hand, in addition to liquidity and lagged GD, the investment performance of conventional insurance companies is also statistically and significantly influenced by interest rate and equity returns. These findings provide policyholders, investors as well as regulators with pertinent information related to an appropriate decision made on Islamic and conventional insurance companies.

Hasnan Baber ·Malaysian Journal of Consumer and Family Economics ·2019

The study is aimed to investigate the gap between the level of service quality expectations and perception and its impact on customer satisfaction in Islamic banks of Malaysia. Shariah Compliance dimension was included in the SERVQUAL model of service quality. A 29 item questionnaire was employed to collect data from 721 customers of selected banks of Malaysia. In this study, data were statistically analysed through reliability analysis, paired sample t-test, exploratory factor analysis, regression analysis and followed by confirmed factor analysis. Structural equation modelling was used to measure service quality perception and customer satisfaction. This study revealed that there is a partial significant gap between expected and perceived service quality level except in Shariah Compliance and tangibility. The study suggested that there is a positive and significant impact of modified multidimensional SERVQUAL quality scale on customer satisfaction. Addition of Shariah compliance dimension showed the highest contributing factor among all dimensions and thus its inclusion was justified. The study was original and novel to find a quality gap and its impact on Malaysian Islamic bank customers and it will help policymakers of Malaysia and other countries to improve to meet customer expectations.

Wan Norhidayah W Mohamad · Faten Nabila Abdul Fatah · Zaiton Samdin · Bakti Hasan-Basri ·International Journal of Economics and Management ·2022 ·JEL: Q51, Q57

The tourism sector plays an important part in Malaysia's economy. It includes beach and recreational tourism. However, most recreational beaches in Malaysia do not impose an entrance fee on visitors. Depending on government funding to maintain recreational beach facilities is not the best option for the future. Therefore, funding directly from visitors is needed to help cater for beach maintenance costs. Based on this, it is crucial to understand how much visitors are willing to pay for the recreational use of beaches, as any money collected could be used to help to improve facilities and services at beach areas. This study investigated visitors' willingness to pay for recreational beach facilities and has provided policy recommendations for better management of tourist facilities and services in the future. Teluk Kemang beach in Port Dickson was chosen as the case study location. This study applied the Choice Experiments (CE) method, and the model used was the Conditional Logit (CL) model. This research used four attributes: amenities, recreational facilities, cleanliness, and entrance fee. The CL results revealed that visitors were willing to pay for good amenities and cleanliness, with values of RM2.07 and RM2.43, respectively. Therefore, it was discovered that it was practical to charge an entrance fee to cover improved maintenance of beach facilities

Kean-Siang Ch'ng · Suresh Narayanan ·Malaysian Journal of Economic Studies ·2019

It is widely held that risk preferences differ between the three ethnic groups in Malaysia with the Chinese having the highest preference for risk and Malays having the lowest. This has been used to explain the Chinese preference for, and success in, business ventures relative to Malays. However, this assumption has never been tested in a controlled environment. Three hundred working adults from the three groups were recruited and participated in two-choice lottery games with real monetary reward and risk. The results were analysed using the framework of cumulative prospect theory. The outcomes indicate that broad generalisations regarding inter-ethnic risk tolerance are inaccurate. Malays were less risk averse than the Chinese or others when facing choices with the possibility of losing but became more risk averse only when facing choices with the possibility of winning. Malays were also more willing to take greater risk to reduce possible loss than to settle for a sure gain, compared to the others.

Parisa Mohammadi · Suzilawati Kamarudin · Rosmini Omar ·International Journal of Economics and Management ·2020 ·JEL: M130, M210

Social entrepreneurship is considered a powerful means that provides sustainable solutions to existing problems, especially in developing societies. Since intention significantly affects the individuals’ involvement in social entrepreneurship, it is extremely important to support the intention of the young generation to move toward social entrepreneurial activities. To achieve this goal, the determinants of social entrepreneurial intention (SEI) need to be recognized and well understood. Literature suggests that Islamic values influence decision-making processes and individuals' intention to become a social entrepreneur. However, little research has been undertaken to understand social entrepreneurship from an Islamic perspective and the mechanism through which values impact social entrepreneurial intention. Using the theory of planned behavior, this study aims to examine the interrelationship between Islamic values, empathy, and SEI. The researchers employed structural equation modeling-partial least square technique to analyze the data. Based on a sample of 202 Muslim students selected from public and private universities in Malaysia, we found that empathy mediates the relationship between Islamic values and SEI. More specifically, Islamic religious values only affect SEI indirectly through empathy. Additionally, empathy positively affects individuals’ intention to establish a social venture. Bringing religion into play sheds light on the antecedents of SEI

AHMAD FAHMI SHEIKH HASSAN · ADI FAZULI MAMAT · YUSUF KARBHARI · MUSLIM HAR SANI MOHAMAD ·International Journal of Economics and Management ·2018 ·JEL: M42; M41;G34

This study examines the effectiveness of an Audit Committee (AC) operating in a large government statutory body in an emerging economy, namely the Inland Revenue Board of Malaysia (IRBM). This study is timely, as previous studies focussing on AC effectiveness in relation to the public sector are sparse. Data collection was through in-depth interviews with key individuals involved in the IRBM governance process, including AC members, senior management and external auditors. The study finds existence of a weak AC governance function that inadequately oversees financial reporting and internal control systems. We find the independence of AC members questionable, as a communication gap exists between AC members and the external auditor. In particular, the study highlights that top management should ensure that its AC fulfils its assigned role and that urgent attention is given to issues on composition, appointment and diligence of its AC members. We conclude that the IRBM should consider improving independence by appointing an external independent AC member(s) from either the big four or an influential industry expert to provide the necessary input and expertise to ensure that public confidence continues.

Ummu Kolsome Farouk · Mok Siew Wing ·Malaysian Journal of Consumer and Family Economics ·2019

The purpose of this research is to understand why a co-founder chose to establish a non-governmental organization (NGO) type social enterprise, the challenges he faced in managing its social and financial sustainability, and the initiatives he took to negotiate those challenges. A narrative approach was used in this qualitative single case study to analyse the self-accounts of the co-founder, and the various internal and external information. The primary drivers of the co-founder's establishment of an NGO type social enterprise were his recognition of an opportunity to redress the prevalence of social ills adversely affecting children, his extensive experience on social issues impacting children, and the successful establishment of his first NGO. Primary challenges faced by the co-founder were notably in terms of maintaining the social relevance of his NGO and securing both its financial sustainability and future scalability. The research is limited by the fact that it is a narrative study, based upon the lived experience, of the co-founder of an NGO type social enterprise. Hence, although the generalizability of the findings is compromised, it can still be placed in the context of past research, in the area of social entrepreneurship in general, underpinned by Malaysia’s social entrepreneurship landscape. This paper provides evidence on how the co-founder of an NGO type social enterprise assessed its developmental stage, measured its success, and paved its path toward becoming a centre of excellence.

Fairus Halizam A Hamzah · Nadiah Abd Hamid · Siti Noor Hayati Mohamed Zawawi · Rohayu Yusup · Norazah Md Azali ·Malaysian Journal of Economic Studies ·2020 ·JEL: G3, M42, E62, H32, E62

The Inland Revenue Board of Malaysia (IRBM) provides a monitoring mechanism of corporate governance through tax audits. However, indicators associated with the tax authority monitoring system remain underexplored due to data confidentiality. This study aims to examine the indicators used by the tax authority in performing tax monitoring where the tax return data of firms that claim reinvestment allowance (RA) were employed alongside the historical audit data of corporate taxpayers of both a tax-monitored firm and an unmonitored tax firm. The results of the analysis reported that the tax authority monitoring system is closely associated with fundamental details disclosed in the tax return namely, assessment year, profitability, scale of operation, firm directorship, tax consultancy and industry type. In contrast, the incidents of tax avoidance and incentive utilisation indicators were not prominent in tax authority monitoring. The investigation of firms that experienced tax monitoring provides insight into indicators which interest tax authorities when it comes to a firm’s tax audit. This research revealed new evidence on IBRM preferred indicators in conducting tax monitoring.

SOH WEI NI · ANNUAR MD NASSIR · CHENG FAN FAH ·International Journal of Economics and Management ·2018 ·JEL: M42; M41

A corporate cash holding is significant element in the cash and liquidity management. Corporations with higher excessive cash reserves will benefit when high liquidity makes it easier for managers to transfer funds among several of the corporations’ expenses and debts, and allows for more flexibility in managing daily operational activities. However, it raise some issue as firm with higher cash holdings tend to explore to higher agency cost due to the conflict of interest between ownership and management. This study employs data envelopment analysis (DEA) estimation and two-stage regressions model. The findings conclude that the firm size, firm growth, and gross domestic product (GDP) are statistically significant for firm efficiency in both markets. The cash holdings help improve firm efficiency as the adjusted R-square is significantly increased for all models. However, the cash holdings are not related to the efficiency of high-cash holding firms for these two stock exchanges. The contribution of cash holdings to firm efficiency is higher, and even double for a developed market compared with a developing market (Bursa Malaysia), which shows that the development stage of a country impacts on cash holdings’ contribution to firm efficiency.

Maya Puspa Rahmana · Nurfatihah Senusia ·Malaysian Journal of Consumer and Family Economics ·2019

This study explores the understanding, role and participation of the SMEs on digital economy, in line with the aspiration by the Malaysian government to have higher growth contribution coming from this segment. The primary data is collected from a semi-structured interview with six SMEs around Klang Valley from various industries and the analysis is conducted using coding and thematic analysis. Most of the SMEs interviewed are aware on the importance of online presence but lack the understanding on its contribution towards digital economy. While a high number of them are ready to embrace technology driven tools for sales, several others are still quite skeptical and facing difficulties in related cost management. This paper aims to offer specific insights from the SMEs on digital economy and the Malaysia’s move towards adopting the relevance of the fourth industrial revolution. It also identifies some of the issues to be tackled by the government in order to have more SMEs participation in the Malaysian digital economy.

Lim Boon-Leong (Tunku Abdul Rahman · University College) · Foong Swee-Sim ·International Journal of Economics and Management ·2020 ·JEL: G32, G34

We examine whether managerial ability is an essential factor that determine CEO remuneration, and as means in resolving both Type I and Type II agency conflicts. Our sample is based on Malaysian family listed companies over 2009-2015, and our results show that, apart from being a crucial determinant of professional CEO remuneration, managerial ability also plays an important role in enhancing the pay-performance sensitivity of outsider manager of Malaysian family firms. Our results also show that the positive association between managerial ability and remuneration of family CEO only helps to mitigate the risk of Type II agency conflict. This agency risk is further heightened by the existence of a significant negative effect of managerial ability on CEO payperformance sensitivity in firms which appoint family CEO as board chairman; and firms with CEO who serves on the remuneration committee. These results are robust to alternative measures of firm performance as well as tests of endogeneity

1 KHAIRI FAIZ MAZRI · RINA FADHILAH ISMAIL (Universiti Teknologi Mara (UiTM)) · ROSHAYANI ARSHAD (Universiti Teknologi Mara (UiTM)) · SITI AISYAH KAMARUZAMAN (Universiti Teknologi Mara (UiTM)) ·International Journal of Economics and Management ·2018 ·JEL: C63; G21

An increase in the number of Shariah-compliant companies in Malaysia has greatly contributed to stabilising the Islamic Capital Market (ICM). The aim of this study is to examine the nature and extent of Islamic Social Reporting (ISR) practices among Shariah-compliant companies listed on the ACE Market in Malaysia. The study also examines the potential existence of a relationship between corporate governance attributes and ISR. The study focuses on four attributes of corporate governance: Shariah supervisory board size, Audit quality, Audit committee and Muslim ownership. A sample was selected comprising 53 Shariah-compliant companies listed on the ACE Market of Bursa Malaysia during the three-year period of 2015–2017. The study uses content analysis, with ISR coded according to a modified Islamic Social Disclosure Index. The results show significant relationships between the corporate governance attributes of board size, audit quality and audit committee, and ISR. This may reflect the benefits of having more board members with a range of expertise and experience in terms of the ability to make better reporting decisions. The appointment of auditors from the Big 4 firms indicates more transparent reporting practices, while an audit committee, serving as a management watchdog, may encourage more transparent reporting in annual reports. The findings may help to strengthen the understanding of parties such as regulators, practitioners and potential investors of the attributes of effective governance among growing companies in Malaysia.

Ahmad Suffian Mohd Zahari (Universiti Teknologi MARA · Yus Heary Mahmud · Raja Mariam Raja Baniamin ·International Journal of Economics and Management ·2019

Job satisfaction involves the emotions and their behavioural expression towards their job. It is known that a job is the activity which involves the satisfaction of emotion and expression. These emotions and behavioural expression is in relation to the pleasant or unpleasant feeling that they experienced towards their job fulfilment within an organization. These feelings are influenced by job-related factors. This had highly suggested that a job satisfaction level should be well accepted and satisfied by any employees to guarantee a minimal turnover for any organization. Therefore, the objective of this study is to identify the factors that influence job satisfaction among Fire and Rescue Department of Malaysia, Terengganu (FRDMT) fire fighters. It involves fire fighters from different grade level. It is important to identify job satisfaction among them in order to acknowledge their expression towards job satisfaction and to accommodate their opportunities to voice their opinion anonymously. This study uses primary data of 234 Fire and Rescue Department of Malaysia, Terengganu (FRDMT) fire fighters. Stratified random sampling technique was utilized for data collection, which is then analyzed using the descriptive and correlation analysis in order to achieve the objectives of the study. The findings showed that only working environment and co-workers significantly influence job satisfaction. Meanwhile, for the other three variables, namely promotion, reward and leadership style did not influence job satisfaction.

Swee-Sim Foong · Jiunn-Shyan Khong · Boon-Leong Lim ·Malaysian Journal of Economic Studies ·2021 ·JEL: G32, G34

This paper examines the risk taking behaviour of Chinese CEO. Our analysis is based on a sample of 362 family firms in Malaysia over the 2009-2015 period using panel GMM methodology. Firstly, our results offer evidence that Chinese CEOs are risk taking. We then examine how CEO power, in the context of Finkelstein’s (1992) structural power, ownership power, expert power and prestige power, might drive risk taking of Chinese CEOs. The results are rather mixed where greater ownership power is likely to promote higher risk taking but greater expert power resulted in lower risk taking. We further show that corporate governance can mitigate risk taking of Chinese CEO in family firms. When the proportions of independent directors and foreign institutional shareholdings exceed the median thresholds of 40% and 5%, respectively, we find that CEO risk taking behaviour turns from positive to negative. Stronger evidence is found when we adjust the thresholds to the 75th percentile of 50% and 15%, respectively. The result is also robust with the use of leverage as a measure for CEO risk taking.

Sui Hai Juan · Irene Wei Kiong Ting · Qian Long Kweh · Liu Yao ·Institutions and Economies ·2018 ·JEL: M12; M5

Employee engagement has emerged as a hot topic among academics and scholars over the last decade since organisations worldwide have adopted that lingo. However, little is known about how knowledge sharing,one of the main resources for organisations to maintain their competitive advantages, would affect employee engagement. Therefore, the objective of this study is to assess the impact of knowledge sharing on employee engagement based on the social capital theory. Data was obtained via questionnaires distributed to 180 randomly selected academics of public and private universities in Malaysia. This study applies multiple regression models to examine how three dimensions of knowledge sharing, namely structural, relational and cognitive, affect employee engagement. The results show all three aspects of knowledge sharing significantly and positively affect employee engagement. Specifically, work environment, leadership, organisational policies, communication, training andcareer development, compensationandteam andco-workers in the knowledge sharing context improve employee engagement. This study is among the first to examine howorganisations can better utilise knowledge sharing to engage their employees at work, which in turn help the organisation attain and sustain competitive advantages. Therefore, the addresses of knowledge sharing and employee engagement in this study are important and deserve further enrichments by including other knowledge management practices in the models.