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Corporate governance, innovation investment and firm performance: evidence from Malaysian public listed companies

Author

Listed:
  • Norlizan MAT RABI

    (School of Management, Universiti Sains Malaysia, Penang)

  • Abdul Hadi ZULKAFLI

    (School of Management, Universiti Sains Malaysia, Penang)

  • Mohd Hassan CHE HAAT

    (Faculty of Management and Economics, Universiti Malaysia Terengganu)

Abstract

Increasing attention is given in monitoring the management team by the shareholders through corporate governance mechanism. This is to ensure that every strategic business decisions maximize shareholders’ wealth. Unlike previous studies which identified a direct relationship between corporate governance mechanism and performance, this study is conducted to examine the moderating impact of the corporate governance mechanism on the relationship between innovation investment proxies by R&D expenditures and firm performance. Our findings concluded that board compensation and frequency of board meeting are considered as important characteristics that would determine the effectiveness of the innovation investment. Thus, in analyzing the innovation investment incurred by the firm, investors should review the corporate governance characteristics as it would determine the effectiveness of the innovation investment in improving firm performance.

Suggested Citation

  • Norlizan MAT RABI & Abdul Hadi ZULKAFLI & Mohd Hassan CHE HAAT, 2010. "Corporate governance, innovation investment and firm performance: evidence from Malaysian public listed companies," Economia. Seria Management, Faculty of Management, Academy of Economic Studies, Bucharest, Romania, vol. 13(2), pages 225-239, December.
    • Handle: RePEc:rom:econmn:v:13:y:2010:i:2:p:225-239
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    Citations

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    Cited by:

    1. Showkat Ahmad Busru & G. Shanmugasundaram, 2017. "Effects of Innovation Investment on Profitability and Moderating Role of Corporate Governance: Empirical Study of Indian Listed Firms," Indian Journal of Corporate Governance, , vol. 10(2), pages 97-117, December.
    2. repec:mth:ijafr8:v:8:y:2018:i:3:p:140-155 is not listed on IDEAS
    3. Erlane K Ghani & Ham Xairyani Mohamed & Kamaruzzaman Muhammad, 2019. "Board Characteristics and Foreign Direct Investment in Public Listed Property Companies: A Malaysian Evidence," International Journal of Financial Research, International Journal of Financial Research, Sciedu Press, vol. 10(3), pages 116-131, May.
    4. Shital Jhunjhunwala & Shweta Sharda & J. P. Sharma, 2021. "Translating Innovation into Performance: Understanding Role of the Board," Indian Journal of Corporate Governance, , vol. 14(1), pages 9-26, June.

    More about this item

    Keywords

    corporate governance; innovation; performance.;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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