Research

Mohd Yassir Jaafar · Anuar Nawawi · Ahmad Saiful Azlin Puteh Salin ·Pertanika Journal of Social Science and Humanities ·2019

This study is intended to examine the levels of directors’ remuneration disclosure among public-listed companies in Malaysia. It further aims to examine the relationship among total directors’ remuneration, directors’ education level, size of external auditors, and proportion of managerial ownership and directors’ remuneration disclosure. The analysis is conducted based on three models, which are constructed from the Malaysian Code on Corporate Governance (Model 1), Global Practices (Model 2), and a combination of both Malaysian Code on Corporate Governance and Global Practices (Model 3). This study found that the size of external auditors had a positive significant relationship, while the proportion of managerial ownership had a negative significant relationship with the disclosure. This study contributes to the improvement of policymaking and body of knowledge by highlighting the relationship between the selected corporate governance characteristics and directors’ remuneration disclosure in the context of Malaysia.

Abd Halim Ahmad · Nur Adiana Hiau Abdullah · Kamarun Nisham Taufil Mohd ·International Journal of Economics and Management ·2022 ·JEL: G33, G32, G34

This study examined the effects of institutional factors, including; board size, blockholder ownership, and political connections, as some of the determinants (apart from various company-level financial variables) on the outcomes of financially distressed listed companies in Malaysia. A highly concentrated ownership structure is common in most developing countries, including Malaysia. Besides, Malaysia has a unique disclosure environment where all listed companies must release relevant and adequate information to the public to improve investors' protection and corporate transparency. Therefore, Practice Notes which are standards and measures for Malaysian Listed Companies, are designed to help listed companies that are financially distressed to restructure their debts within a stipulated time, giving them sufficient time to re-emerge in the exchange. The logistic regression analysis results on a sample of financially distressed Malaysian public listed companies suggested that; interest coverage ratio, stock returns, blockholder ownership, and political connections were significance at the 5% level. The institutional variables suggested that blockholder ownership and political connectedness had a positive and significant effect on the possibility of companies emerging from financially distressed conditions. The findings have provided important practical implications for managers and potential investors in their risk management decisions.

Ai-Xin Lee · Chee-Wooi Hooy ·Malaysian Journal of Economic Studies ·2020 ·JEL: G21, G28, G32

This paper examines the relationship between state ownership and banks’ risk-taking in nine Asian emerging markets for the period 2009 to 2017. The finding shows that state-owned banks are associated with higher risk-taking in terms of credit risk and return volatility. In addition, we investigate the effect of corporate governance (CG) mechanism with monitoring committee, board independence and gender diversity on state-owned banks’ risk-taking. We find that the presence of monitoring committee on board has a reducing effect on state-owned banks’ risk-taking. We further argue that independent directors help to reduce banks’ risk-taking where their supervision should be robust enough even if there is huge government intervention. Nonetheless, we do not find strong evidence on the role of female directors. In a nutshell, board functions play a crucial role in monitoring and supervising banks’ investment decisions to prevent excessive risk-taking from the government, which is relatively important in the context of Asian emerging markets.

Mohd Adib Ismail · Sharlily Shahira Mat Nasir ·Jurnal Ekonomi Malaysia ·2019

Financial resources are an important factor in investment decisions. Access to fnancial resources is a key determinant to increase productivity and consequently generate frm growth. This paper aims to investigate the impact of fnancial constraints, ownership types and structures on frm productivity. This study used annual data of frms listed on the main board of Bursa Malaysia from 2000 to 2015. This study employed system generalized method of moments (GMM) to analyze the impact of fnancial constraints, ownership and other control variables on productivity. The results show that fnancial constraints, and the ownership types and structures cause different impacts on frm productivity. Using the sub-sample analyses of government, private and foreign frms, the results indicates that foreign frms are most affected by fnancial constraints followed by government frms and private frms. In the negative liquidity situation, the fnancial constraints faced by government and private frms have increased. Meanwhile, exports have managed to reduce the impact of fnancial constraints on foreign frms. The analysis of ownership structure analysis fnds that it does not affect frm productivity. Hence, to boost domestic economic growth policy makers should formulate strategies that support frm fnancial aspect to ensure increased productivity and growth of local frms in Malaysia.

Fazelina Sahul Hamid · Muhamed Zulkhibri ·Institutions and Economies ·2019 ·JEL: E44; E52

This paper examines the effectiveness of bank lending channels in ASEAN countries. The main objective of this paper is to identify whether the effectiveness of bank lending channels in ASEAN differs based on the countries’ financial structure, banks’ fundamentals and ownership type. The study makes use of unbalanced panel data of 214 commercial banks in nine ASEAN countries for the period from 2001 to 2015. Analysis using dynamic GMM estimators finds that the bank lending channel is more effective in CLMV countrieswhich have a less-developed financial sector compared to ASEAN-5 countries which have a moredeveloped financial sector. Particularly, we find that smaller banks with less liquidity have a broader scope to expand their financing portfolios when interest rates rise. We also find that foreign banks in ASEAN-5 countries andstate-owned banks in ASEAN countries weaken the effect of monetary policy transmissions. However, local banks are vulnerable to changes in monetary policy. Further analyses confirm that the influence of ownership structure on credit growth is partly driven by the differences in the banks’ specific characteristics.Our findings suggest that theeffectiveness of bank lending channel depends on financial structure, bank fundamentals and ownership structure. The regulators need to take this into account to ensure that the changes in monetary policy achieve the desired objectives.

Neshaleni S. Paramanantham · Irene Wei Kiong Ting · Qian Long Kweh ·Institutions and Economies ·2018 ·JEL: G31; G32; G34

This study examines the impact of ownership concentration on debt structure. Based on marketcapitalisation, we obtained financial and governance data from Top 100 public listed companies in Malaysia for the period 2011-2015. Ordinary least squares and fixed-effect panel models were employed for examining data. The regression results showed that ownership held by the top five shareholders significantly and negatively affected long term debt and total debt ratios. The results remain qualitatively similar in both estimations using the ordinary least squares and fixed-effect panel models. In summary,this study offers some insights into how concentrated ownership influence corporate debt structure.

Fazelina Sahul Hamid ·Journal of Asian Economics ·2020

We analyze the lending cyclicality of 213 ASEAN commercial banks over the period 2001–2015. The findings indicate that lending by private banks is procyclical while lending by state banks is countercyclical. Long-term liabilities also move countercyclically for state banks whereas funding for non-state banks in the form of deposit and long-term liabilities is procyclical. Greater lending cyclicality is observed for both private and state banks in Cambodia, Myanmar, Laos, and Vietnam (CMLV) compared to Indonesia, Malaysia, the Philippines, Thailand, and Singapore (ASEAN-5). Lending of non-ASEAN based foreign banks shows greater procyclicality than that of domestic banks for the ASEAN-5 countries, although not for the CMLV countries. During the global financial crisis, lending by non-ASEAN based foreign banks contracted sharply even as lending by ASEAN based foreign banks was unaffected. Overall, our results confirm that bank ownership influences lending and funding sensitivity to economic fluctuations.

Miao Zhanga · Md Aslam Mia ·Journal of the Asia Pacific Economy ·2020 ·JEL: D22 F23 L60 O14

With cognizance to firms’ heterogeneity in an industry, this paper employs the most recent, unpublished and large-scale firm-level data of 14,687 manufacturing firms in Malaysia in 2015 to revisit the drivers of manufacturing exports. Applying the OLS and logistic regressions, we observed a strong positive relationship between a firm’s labor productivity and export intensity. Firms’ foreign ownership, size and age are positively connected to their export competitiveness. The incorporation of location variables into the regression reveals that firms in the Southern peninsula of Malaysia (e.g., Johor) have a positive effect and demonstrate the highest probability to engage in export activities. Our study is informative to trade policymakers on the key drivers of manufacturing exports, providing references to not only Malaysia, but other economies in Eastern Asia and developing nations.