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Corporate Performance and Governance in Malaysia

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  • Luc E. Leruth
  • Yougesh Khatri
  • J. Piesse
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    Abstract

    This paper measures corporate sector performance (efficiency) and empirically examines the role of corporate governance. A stochastic frontier with inefficiency effects is fitted to a panel dataset of 31 of the largest nonfinancial companies listed on the Kuala Lumpur Stock Exchange for the period 1995 to 1999. Focusing specifically on the impact of the system of corporate governance and the level of control on firm-level performance, results show an underlying vulnerability in these firms, exacerbated by their reliance on bank-based borrowing and a highly concentrated shareholding structure with complex cross holdings. Furthermore, debt does not appear to have the control features present in outsider systems of corporate governance.

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    Bibliographic Info

    Paper provided by International Monetary Fund in its series IMF Working Papers with number 02/152.

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    Length: 24
    Date of creation: 01 Sep 2002
    Date of revision:
    Handle: RePEc:imf:imfwpa:02/152

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    7. Crama, Y. & Leruth, L. & Renneboog, L.D.R. & Urbain, J-P., 1999. "Corporate Governance Structures, Control and Performance in European Markets: A Tale of Two Systems," Discussion Paper 1999-97, Tilburg University, Center for Economic Research.
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    Cited by:
    1. Se-Jik Kim, 2003. "Macro Effects of Corporate Restructuring in Japan," IMF Working Papers 03/203, International Monetary Fund.
    2. Crama, Yves & Leruth, Luc, 2007. "Control and voting power in corporate networks: Concepts and computational aspects," European Journal of Operational Research, Elsevier, vol. 178(3), pages 879-893, May.

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