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Non-linearity between family control and firm financial sustainability: moderating effects of CEO tenure and education

Author

Listed:
  • Norazlin Ahmad

    (Universiti Malaysia Pahang)

  • Irene Wei Kiong Ting

    (Universiti Malaysia Pahang)

  • Imen Tebourbi

    (Canadian University Dubai)

  • Qian Long Kweh

    (Canadian University Dubai)

Abstract

We investigate the non-linearity between family control and firm financial sustainability and the manner in which CEO tenure and education moderate the non-linear relationship. We apply fixed-effects panel regression and several alternative tests, including two-stage least squares, in studying 2844 firm-year observations of Malaysian publicly listed firms during the period 2009–2019. We find a non-linear U-shaped relationship between family control and firm financial sustainability. Specifically, once levels of family control exceed a certain threshold, the relationship between family control and firm financial sustainability becomes positive. Moreover, CEO tenure and education moderate this non-linearity. That is, when family control is at a low (high) level, both moderators lessen (increase) the negative (positive) effects of family control on firm financial sustainability.

Suggested Citation

  • Norazlin Ahmad & Irene Wei Kiong Ting & Imen Tebourbi & Qian Long Kweh, 2022. "Non-linearity between family control and firm financial sustainability: moderating effects of CEO tenure and education," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 12(4), pages 719-741, December.
    • Handle: RePEc:spr:eurasi:v:12:y:2022:i:4:d:10.1007_s40821-021-00197-7
    DOI: 10.1007/s40821-021-00197-7
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    More about this item

    Keywords

    CEO tenure; CEO education; Family control; Firm financial sustainability; Non-linearity; Malaysia;
    All these keywords.

    JEL classification:

    • M20 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - General
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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