All Research

Azadeh Hadian · Cahit Adaoglu ·Journal of Asian Economics ·2020 ·JEL: F30, G32

This study examines the value effects of financial and operational hedging in a managed floating exchange rate regime with strict limitations on the trading of Malaysian Ringgit for a sample of 109 Malaysian multinationals from 2004–2018. Using Tobin’s Q as a proxy for company value, the two-step system GMM estimation results show that, on average, derivatives hedging creates a value premium range of 7.88–8.21 % in the short-run, and 18.81–19.80 % in the long-run. This value premium emerged both after controlling for non-operational foreign exchange profits (losses), and its two components: transaction and translation profits (losses). In contrast, foreign debt hedging, on average, creates a value discount range of 8.19–8.54 % in the short-run and 12.70–13.12 % in the long-run. No evidence shows value effect for operational hedging though. The positive value effect of derivatives hedging should motivate managers of Malaysian multinationals to hedge foreign currency exposure through derivatives and encourage policymakers to take steps in developing derivatives market and products. However, the negative value effect of foreign debt hedging indicates that it destroys value. This negative effect might reflect two potential causes; higher company risk due to FC debt financing, and improper hedging practices including high costs of hedging in the underdeveloped derivatives market. These potential causes need further empirical evaluations.

Shahanif Hasan · Aza Azlina Md. Kassim · Mohamad Ali Abdul Hamid ·International Journal of Economics and Financial Issues ·2020 ·JEL: G3, M42

In recent decades, there has been a noticeable increase in the practice of earnings management (EM) as a proxy for financial reporting, especially real activities, with effect on the quality of financial statements. The role of the audit committee in mitigating EM remains ambiguous because of inconclusive findings. Therefore, this study examines the moderating effect of audit quality and audit committee on financial reporting quality, also known as real earnings management in Malaysian companies. The results show that corporate governance mechanism such as financial accounting expert, meeting and indicate significant results with real EM while, audit committee independence and size, shows an insignificant result on real EM. In addition, the results show that audit quality of the audit committee leads to less aggressive EM practice in real activities. The findings also show that audit quality and audit committee has a significant role in restricting the real EM. Audit quality is found to significantly moderate the relationship between audit committee with financial reporting governance practices in ensuring credible accounting information

Chai-Thing Tan · Azali Mohamed · Muzafar Shah Habibullah · Lee Chin ·South Asian Journal of Macroeconomics and Public Finance ·2020 ·JEL: E52, E58, E62, C01

This article analyses the impact of monetary and fiscal policies on economic growth in Malaysia, Singapore and Thailand from 1980:Q1 to 2017:Q1. Autoregressive distributed lag (ARDL) approach is employed to determine the long-run relationship. Further, a range of econometric models, such as fully modified least squares method (FMOLS), canonical cointegration regression (CCR) and dynamic ordinary least squares method (DOLS), are applied to check the robustness. The results are stable and robust as all the models yield consistency result. The main findings in this study demonstrate that: (a) interest rate had a negative impact on economic growth in three selected countries.

Yusniliyana Yusof · Kaliappa Kalirajan ·Journal of Economic Studies ·2020

The study contributes to the aim of regional development policy in reducing regional disparities, by examining the spatial balance in socioeconomic development across the states of Malaysia based on composite development index (CDI). Besides, the study has attempted to understand the issues in the development gaps across Malaysian states by evaluating the factors that explain the variation in economic growth. This study uses three-stage least squares (3SLS) and bootstrap sampling and estimation techniques to examine the factors that explain the variations in the growth of development across the states in Malaysia. The analysis involves 13 states in Malaysia (Johor, Melaka, Negeri Sembilan, Pulau Pinang, Perak, Perlis, Selangor, Kedah, Kelantan, Pahang, Terengganu, Sabah and Sarawak) from 2005 to 2015. The pattern in the spatial socioeconomic imbalance demonstrates a decreasing trend. However, the development index reveals that the performance of less developed states remained behind that of the developed states. The significant factors in explaining the variation in growth across the Malaysian states are relating to agriculture, manufacturing, human capital, population growth, Chinese ethnicity, institutional factors and natural resources.

Shaikh Hamzah Abdul Razak ·International Journal of Sociology and Social Policy ·2020

Purpose Zakat has a strong humanitarian and social-political value. Zakat occupies a central role in Islamic fiscal policy and operations. At the same time, it does not preclude the use of modern tools and techniques in raising the state revenues. Islam provides its own comprehensive approach how the state can raise its revenue and how the revenue should be spend. Zakat is collected from those who are qualified and distributed to the eight recipients as identified in the Quran. Waqf instrument plays an important role in Muslim societies as its support the aged, the poor, the orphans through provision of education, training and business activities. The creation of waqf is strongly advocated, especially the creation of cash waqf in view of the expensiveness of land as waqf. There are collaboration efforts for cash waqf and zakat collection being done through Islamic banks and takaful. The paper aims to discuss these issues. Design/methodology/approach The data were source from the inland revenue, government agencies and state religious authorities, interviews, articles and conference reviews, as well as economic reports and later transcribe into charts and figures. Findings Its shows the efficiency of wealth distribution according to the Islamic principles and application of the financial inclusion in the Islamic society. Research limitations/implications The limitation is in verifying the accuracy of data gathering from the government agencies. Social implications The study can be used in financial inclusion through the application of zakah and waqf being applied to alleviate poverty. Originality/value The research is an extended work done on zakah and waqf in Islamic wealth distribution.

Fathin Faizah Said · Sharifah Nur Ainn Syed Roslan · Mohd Azlan Shah Zaidi · Mohd Ridzwan Yaakub ·Economies ·2021

A ban on palm oil imports by the European Union has become a problematic issue, especially for palm oil producers’ countries. Oil palm has been widely used in many sub-sectors, and any changes in the production side may affect many sectors that use oil palm as an input factor in their productions. This study explores the chain of the oil palm sector on the other sub-sectors in Malaysia by using a value-added multiplier method and network modeling. The study focuses on the specific oil palm sub-sector and oils and fats sub-sector in the Malaysian economic structure based on the Malaysian Input-Output 2015 Table. Network visualization and all the analyses involving network methods were developed and performed using UCINET and GEPHI software. The value-added multiplier results explained that the net value between output multiplier and import multiplier is vital to depict the real impact of net resources used as an input factor in the oils and fats and oil palm sub-sectors. The high-density value level shows that the Malaysian oil palm sector has high connectivity in the economic system. From the network visualization analysis, the oils and fats sub-sector has a high level of integration with other sectors within the network. Meanwhile, the oil palm sub-sector categorized in the periphery structure group has a low level of integration in the input-output network. This is due to the high value-added demand for oil palm in the oils and fats sub-sector in the manufacturing sector. Overall, most of the sub-sectors in Malaysia are highly interconnected due to the high clustering ratio. Therefore, ensuring sufficient oil palm production is vital for sustainable production of other sub-sectors

Shankaran Nambiar ·The European Journal of Development Research ·2021

The purpose of this paper is to argue that the capability approach can benefit from thinking in institutional economics. If the locus of the capability approach is moved from the individual to groups or communities, then it is imperative that institutions (conceived as formal and informal rules) be explicitly considered when applying the framework, particularly when social relations matter, as in microcredit or poverty alleviation. Rules underpin transactions and behaviour in society, so it stands to reason that capability improvement, or its lack, be examined from the vantage point of rules as understood by institutional economics. Applying institutional economics to the capability approach will open up different ways of analysing capabilities in communities.

Zubair Hassan · Muneeb Khan Lashari · Abdul Basit ·Entrepreneurial Business and Economics Review ·2021 ·JEL: O15, P47, Q01, Z12

This study contributes to the existing literature on promoting entrepreneurial culture among students by establishing the key determinants of entrepreneurial culture through risk-taking behaviour, innovation, creativity, and empowerment. One of the unique aspects of this research is that these four factors are studied together and tested based on what academic institutions in Malaysia do to cultivate entrepreneurial culture among the students.

Rosmaria Jaffar · Chek Derashid · Roshaiza Taha ·Journal of Asian Finance, Economics and Business ·2021 ·JEL: H25, H26, M41

The purpose of this study is to examine the level of aggressive tax planning (ATP) among companies listed in the Access, Certainty, Efficiency (ACE) Market of Bursa Malaysia. On top of that, this study also investigates the relationship between company characteristics, ethnicity, and ATP. This study uses a balanced pooled sample of 105 firm years-observations for the period from 2014 to 2018. These samples were selected to provide new insight into this market and to explore the attitude of small firms toward ATP in Malaysia. The data was retrieved from DataStream and the downloaded annual reports. The finding shows that profitability and financial distress have a significant relationship with ATP. Other variables including size, capital intensity, inventory intensity, leverage, and ethnicity, were not determinants of ATP. The result in this study may assist the reader in understanding the nature of companies in the ACE market, particularly on its behavior toward tax planning. A strict requirement is needed to be adopted in the sample selection process, thus limiting the sample size. Further, since the previous study focused on large companies, the discussion of this paper will provide new insight into the nature of tax planning within the small- and medium-sized companies in Malaysia.

NurulHuda Mohd Satar · Md. Khaled Saifullah · Muhammad Mehedi Masud · Fatimah Binti Kari ·International Journal of Social Economics ·2021

In light of the rapid evolution of information and communication technology (ICT), every society is faced with many issues such as social exclusion, inequality and the digital divide. Hence, there is need to solve these complex challenges without comprising any development objective. A practical solution in this regard includes establishment of a sustainable model of community development. Therefore, this paper aims to identify the role of education in promoting the awareness on the use of ICT-based infrastructure among the general public to enhance their socioeconomic status. In addition, this study sets out to establish the nexus between socioeconomic status, ICT programme as well as the awareness of Kemaman Smart Community (KSC) development project.

Ibnu Qizam ·Entrepreneurial Business and Economics Review ·2021

The objective of the article is to investigate two issues. First, whether the Islamic bond (sukuk) ratings are the key determinant in affecting stock returns and, second, whether firm-characteristic variables moderate the sukuk ratings effect on stock returns. This study applied the panel estimated generalized least squares (EGLS) regression for two samples (from Indonesia and Malaysia) spanning two years, 2015-2016, for all variables, except for the intrinsic-value variable which spanned eight years, 2009-2016. The results show that the direct and positive effect of sukuk ratings on stock returns are significantly present in Malaysia but not in Indonesia, while the positive and significant moderating effects of firm-characteristic variables – especially leverage and intrinsic value of the firm – are more pronounced in the positive sukuk rating-stock return relationship in Indonesia than in Malaysia.

Yuegang Song · Ruixian Huang · Sudharshan Reddy Paramati · Abdulrasheed Zakari ·Economic Analysis and Policy ·2021

This study empirically examines the impact of economic integration on stock market co-movements of India with major Asian markets such as China, Indonesia, Japan, Korea, Malaysia, the Philippines, Singapore, and Thailand. We collect daily data on stock market indices from September 1999 to December 2017. The asymmetric generalised dynamic conditional correlation GARCH model is applied to estimate the time-varying conditional correlations among the various stock markets. Next, the panel autoregressive distributed lag method is applied to investigate the impact of economic integration on stock market co-movements. Our results show that economic integration has a significant positive impact on stock market co-movements in the region. The results also provide supporting evidence that the global financial crisis positively contributed to stock market interdependence in the Asian region.

Julien Chaisse · Manfred Elsig · Sufian Jusoh · Andrew Lugg ·Journal of International Economic Law ·2021

The investment chapter in the recently signed Regional Comprehensive Economic Partnership (RCEP) has the potential to affect investment decisions in the Asia-Pacific region and beyond. Yet, we know relatively little about the pathways through which countries determine the content of investment law in preferential trade agreements (PTAs). In this article, we use quantitative text analysis to test theoretically informed conjectures about the negotiation process. We focus on which of the signatories’ past agreements most influenced RCEP, and whether countries chose to draw more from treaty practice through their previous PTAs or bilateral investment treaties (BITs). Our analyses yield several noteworthy findings. First, we show that no single country dominated the negotiation process, instead RCEP represents an effort to reconcile overlapping agreements around a more common template. Second, contrary to the fears of some observers, we show that larger powers such as China and Japan did not overwhelmingly impact the agreement, instead portions were influenced by Association of Southeast Asian Nations agreements, the Comprehensive and Progressive Trans-Pacific Partnership, and others. Finally, we show that, on average, countries drew more from PTAs than BITs, but that they switch strategically between them to reuse language that they deem important for the development of investment law.

Mahmood Mehraaein · Rafia Afroz · Mehe Zebunnesa Rahman · Md Muhibullah ·Journal of Asian Finance, Economics and Business ·2021 ·JEL: C22, E01, F18, P18, Q42

The objective of this paper is to investigate the impact of economic growth (per capita real GDP), the square of per capita real GDP, energy use, financial development (FD), and foreign direct investment (FDI) on ecological footprint (EF) in the case of Malaysia over the period 1971–2014, by employing the ARDL approach. The long-run results revealed that economic growth has a significant positive impact on the ecological footprint and it implies that the economic growth deteriorates the environmental quality in Malaysia. Conversely, the square of GDP showed a negative and significant impact on the EF in the long run. As the coefficient of GDP in our study is positive and statistically significant while the coefficient of squared GDP is negatively significant, thus, this study supports the presence of the environmental Kuznets curve (EKC) hypothesis in the case of Malaysia. Furthermore, the result indicates that FDI has a positive and significant impact on the EF in the long run, which means a rise in FDI will enhance the environmental pollution level. Thus, it confirms the pollution haven hypothesis. Hence, it suggests that Malaysia imposes stricter environmental policies. Further, FDI and FD are causing GDP in Malaysia, but through increasing EF.

Filzah Md Isa · Nik Maheran Nik Muhammad · Azizah Ahmad · Shaista Noor ·Journal of Economics and Business ·2021

Women entrepreneur has gained utmost importance in the past few decades in Malaysia due to their significant contribution to the country's economic development. However, few business challenges create a constant obstruction for many women entrepreneurs such as lack of ICT knowledge, time constraint to learn ICT, lack of technological expertise, etc. The present study aims to identify the effect of ICT adoption on business performance and examine how ICT usage helped them handle operational business matters. The present study adopted the qualitative research strategy, and researchers interviewed ten (10) women entrepreneurs for this study. A semistructured interview technique was applied, and six Malay and four Chinese entrepreneurs made the study population. The result highlights that Malay and Chinese entrepreneurs use ICT in their business operation such as warehousing system, purchasing system, HRM software and accounting system, purchase order system, production system, internal communication, and AutoCAD. The present study may support the prospective entrepreneurs in considering the ICT usage to embark on technology and innovation and provide inputs to policymakers to design a proper support system for Malaysian women entrepreneurs, particularly those new entrepreneurs who are mostly young and inexperienced.