Advanced Search
MyIDEAS: Login to save this paper or follow this series

Board independence, CEO duality and firm performance: A quantile regression analysis for Indonesia, Malaysia, South Korea and Thailand

Contents:

Author Info

  • RAMDANI, Dendi
  • VAN WITTELOOSTUIJN, Arjen
Registered author(s):

    Abstract

    We study the effect of board independence and CEO duality on firm performance for a sample of stock-listed enterprises from Indonesia, Malaysia, South Korea and Thailand, applying Quantile Regression. Quantile Regression is more powerful than standard linear regression, as reflected in the Ordinary Least Square (OLS) regression method, since Quantile Regression can produce estimates for all conditional quantiles of the distribution of a response variable, whereas OLS regression only estimates the conditional mean effects of a response variable. Moreover, Quantile Regression is better able to handle violations of the standard assumptions of normality, homoscedasticity and absence of outliers. Indeed, we find that the relationship between corporate governance and firm performance variables is different across the conditional quantiles of the distribution of firm performance, something OLS would leave unidentified. This finding suggests that estimating the quantile effect of a response variable can well be more insightful than estimating only the mean effect of this response variable, particularly so when the data violate assumptions required to perform OLS regression, as is often the case in corporate governance research.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: https://www.uantwerpen.be/images/uantwerpen/container1244/files/TEW%20-%20Onderzoek/Working%20Papers/RPS/2009/RPS-2009-004%20ACED%203.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by University of Antwerp, Faculty of Applied Economics in its series Working Papers with number 2009004.

    as in new window
    Length: 36 pages
    Date of creation: May 2009
    Date of revision:
    Handle: RePEc:ant:wpaper:2009004

    Contact details of provider:
    Postal: Prinsstraat 13, B-2000 Antwerpen
    Web page: https://www.uantwerp.be/en/faculties/applied-economic-sciences/
    More information through EDIRC

    Related research

    Keywords:

    References

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
    as in new window
    1. Jaume Garcia & Pedro J. Hernández & Ángel López Nicolás, 1998. "How wide is the gap? An investigation of gender wage differences using quantile regression," Economics Working Papers, Department of Economics and Business, Universitat Pompeu Fabra 287, Department of Economics and Business, Universitat Pompeu Fabra.
    2. Coles, Jeffrey L. & Daniel, Naveen D. & Naveen, Lalitha, 2008. "Boards: Does one size fit all," Journal of Financial Economics, Elsevier, Elsevier, vol. 87(2), pages 329-356, February.
    3. Benjamin E. Hermalin & Michael S. Weisbach, 2001. "Boards of Directors as an Endogenously Determined Institution: A Survey of the Economic Literature," NBER Working Papers 8161, National Bureau of Economic Research, Inc.
    4. Michael Rosholm & Helena Skyt Nielsen, 2001. "The public-private sector wage gap in Zambia in the 1990s: A quantile regression approach," Empirical Economics, Springer, Springer, vol. 26(1), pages 169-182.
    5. José Ferreira Machado & José Mata, 1998. "Earning Functions in Portugal 1982-1994: Evidence From Quantile Regressions," Working Papers, Banco de Portugal, Economics and Research Department w199802, Banco de Portugal, Economics and Research Department.
    6. Pi, Lynn & Timme, Stephen G., 1993. "Corporate control and bank efficiency," Journal of Banking & Finance, Elsevier, Elsevier, vol. 17(2-3), pages 515-530, April.
    7. Anup Agrawal & Charles R. Knoeber, . "Firm Performance and Mechanisms to Control Agency Problems between Managers and Shareholders (Revision of 29-94)," Rodney L. White Center for Financial Research Working Papers, Wharton School Rodney L. White Center for Financial Research 8-96, Wharton School Rodney L. White Center for Financial Research.
    8. Bernard S. Black & Hasung Jang & Woochan Kim, 2006. "Does Corporate Governance Predict Firms' Market Values? Evidence from Korea," Journal of Law, Economics and Organization, Oxford University Press, Oxford University Press, vol. 22(2), pages 366-413, October.
    9. Koenker,Roger, 2005. "Quantile Regression," Cambridge Books, Cambridge University Press, Cambridge University Press, number 9780521845731.
    10. Saibal Ghosh, 2006. "Do board characteristics affect corporate performance? Firm-level evidence for India," Applied Economics Letters, Taylor & Francis Journals, Taylor & Francis Journals, vol. 13(7), pages 435-443.
    11. Khaled Elsayed, 2007. "Does CEO Duality Really Affect Corporate Performance?," Corporate Governance: An International Review, Wiley Blackwell, Wiley Blackwell, vol. 15(6), pages 1203-1214, November.
    12. Yan-leung Cheung & P. Raghavendra Rau & Aris Stouraitis, 2004. "Tunneling, Propping and Expropriation Evidence from Connected arty Transactions in Hong Kong," Working Papers, Hong Kong Institute for Monetary Research 092004, Hong Kong Institute for Monetary Research.
    13. Omar Arias & Walter Sosa-Escudero & Kevin F. Hallock, 2001. "Individual heterogeneity in the returns to schooling: instrumental variables quantile regression using twins data," Empirical Economics, Springer, Springer, vol. 26(1), pages 7-40.
    14. Agrawal, Anup & Knoeber, Charles R., 1996. "Firm Performance and Mechanisms to Control Agency Problems between Managers and Shareholders," Journal of Financial and Quantitative Analysis, Cambridge University Press, Cambridge University Press, vol. 31(03), pages 377-397, September.
    15. Jason Abrevaya, 2001. "The effects of demographics and maternal behavior on the distribution of birth outcomes," Empirical Economics, Springer, Springer, vol. 26(1), pages 247-257.
    16. Raul A. Barreto & Anthony W. Hughes, 2004. "Under Performers and Over Achievers: A Quantile Regression Analysis of Growth," The Economic Record, The Economic Society of Australia, The Economic Society of Australia, vol. 80(248), pages 17-35, 03.
    17. Moshe Buchinsky, 2001. "Quantile regression with sample selection: Estimating women's return to education in the U.S," Empirical Economics, Springer, Springer, vol. 26(1), pages 87-113.
    18. Klein, April, 1998. "Firm Performance and Board Committee Structure," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 41(1), pages 275-303, April.
    19. Gilbert W. Bassett Jr. & Hsiu-Lang Chen, 2001. "Portfolio style: Return-based attribution using quantile regression," Empirical Economics, Springer, Springer, vol. 26(1), pages 293-305.
    20. Koenker, Roger W & Bassett, Gilbert, Jr, 1978. "Regression Quantiles," Econometrica, Econometric Society, Econometric Society, vol. 46(1), pages 33-50, January.
    21. Demsetz, Harold, 1983. "The Structure of Ownership and the Theory of the Firm," Journal of Law and Economics, University of Chicago Press, University of Chicago Press, vol. 26(2), pages 375-90, June.
    22. Eduardo Pontual Ribeiro, 2001. "Asymmetric labor supply," Empirical Economics, Springer, Springer, vol. 26(1), pages 183-197.
    23. Manning, Willard G. & Blumberg, Linda & Moulton, Lawrence H., 1995. "The demand for alcohol: The differential response to price," Journal of Health Economics, Elsevier, Elsevier, vol. 14(2), pages 123-148, June.
    24. Koenker, Roger & Bassett, Gilbert, Jr, 1982. "Robust Tests for Heteroscedasticity Based on Regression Quantiles," Econometrica, Econometric Society, Econometric Society, vol. 50(1), pages 43-61, January.
    25. Rajeev Goel & Edward Hsieh & Michael Nelson & Rati Ram, 2006. "Demand elasticities for Internet services," Applied Economics, Taylor & Francis Journals, Taylor & Francis Journals, vol. 38(9), pages 975-980.
    26. Buchinsky, Moshe, 1994. "Changes in the U.S. Wage Structure 1963-1987: Application of Quantile Regression," Econometrica, Econometric Society, Econometric Society, vol. 62(2), pages 405-58, March.
    27. Daily, Catherine M. & Dalton, Dan R., 1992. "The relationship between governance structure and corporate performance in entrepreneurial firms," Journal of Business Venturing, Elsevier, vol. 7(5), pages 375-386, September.
    28. Cornett, Marcia Millon & Marcus, Alan J. & Tehranian, Hassan, 2008. "Corporate governance and pay-for-performance: The impact of earnings management," Journal of Financial Economics, Elsevier, Elsevier, vol. 87(2), pages 357-373, February.
    29. Geoffrey C. Kiel & Gavin J. Nicholson, 2003. "Board Composition and Corporate Performance: how the Australian experience informs contrasting theories of corporate governance," Corporate Governance: An International Review, Wiley Blackwell, Wiley Blackwell, vol. 11(3), pages 189-205, 07.
    30. Rosenstein, Stuart & Wyatt, Jeffrey G., 1990. "Outside directors, board independence, and shareholder wealth," Journal of Financial Economics, Elsevier, Elsevier, vol. 26(2), pages 175-191, August.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:ant:wpaper:2009004. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joeri Nys).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.