Corporate governance, transparency and performance of Malaysian companies
Purpose - The paper aims to examine the effect of good corporate governance practices on corporate transparency and performance of Malaysian listed companies. Design/methodology/approach - Samples were selected using matched-sampling method and hierarchical regression was employed to test the relationship between among corporate governance mechanism, transparency and performance. Findings - Corporate governance factors have a strong predicting power on company performance, mainly due to debt monitoring and foreign ownership. However, there is a significant negative relation between audit quality and performance. The results find that performance is not associated with the level of disclosure and timely reporting. The results indicate that disclosure and timeliness are not significant contributing factors in the relationship between corporate governance and market performance. Research limitations/implications - The data covers a one-year period of 2002 only. This paper deals only with “one-way” causality running from corporate governance mechanisms to performance, even though, there is evidence of “reverse-way” and “two-way” causality in governance literature. Practical implications - This paper indicates that internal governance mechanisms are not important determinants to corporate performance. However, governance in forms of debt monitoring and foreign ownership have significant influence on corporate performance. Transparency (i.e. disclosure and timeliness of reporting) is not a significant mediating variable between corporate governance and performance. Originality/value - Distinct from previous empirical research as the disclosure level is measured using self-designed corporate governance index. Apart from a study conducted in an Asian setting of Malaysia, the study also tests transparency as a mediating variable between corporate governance and performance
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.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Volume (Year): 23 (2008)
Issue (Month): 8 (September)
|Contact details of provider:|| Web page: http://www.emeraldinsight.com|
|Order Information:|| Postal: Emerald Group Publishing, Howard House, Wagon Lane, Bingley, BD16 1WA, UK|
Web: http://emeraldgrouppublishing.com/products/journals/journals.htm?id=maj Email:
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.:
- Demsetz, Harold & Lehn, Kenneth, 1985. "The Structure of Corporate Ownership: Causes and Consequences," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1155-1177, December.
- Jayati Sarkar & Subrata Sarkar, 2005.
"Debt and Corporate Governance in Emerging Economies - Evidence from India,"
Finance Working Papers
22358, East Asian Bureau of Economic Research.
- Jayati Sarkar & Subrata Sarkar, 2005. "Debt and corporate governance in emerging economies: Evidence from India," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2005-007, Indira Gandhi Institute of Development Research, Mumbai, India.
- J. Dahya & A.A. Lonie & D.M. Power, 1996. "The Case for Separating the Roles of Chairman and CEO: An Analysis of Stock Market and Accounting Data," Corporate Governance: An International Review, Wiley Blackwell, vol. 4(2), pages 71-77, 04.
- Philip Stiles & Bernard Taylor, 1993. "Maxwell - The Failure of Corporate Governance," Corporate Governance: An International Review, Wiley Blackwell, vol. 1(1), pages 34-45, 01.
- Charlie Weir & David Laing & Phillip J. McKnight, 2002. "Internal and External Governance Mechanisms: Their Impact on the Performance of Large UK Public Companies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 29(5&6), pages 579-611.
- Gerald F. Davis, 1996. "The Significance of Board Interlocks for Corporate Governance," Corporate Governance: An International Review, Wiley Blackwell, vol. 4(3), pages 154-159, 07.
- Weisbach, Michael S., 1988. "Outside directors and CEO turnover," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 431-460, January.
- DeAngelo, Linda Elizabeth, 1981. "Auditor size and audit quality," Journal of Accounting and Economics, Elsevier, vol. 3(3), pages 183-199, December.
- Fama, Eugene F & Jensen, Michael C, 1983. "Separation of Ownership and Control," Journal of Law and Economics, University of Chicago Press, vol. 26(2), pages 301-325, June.
- Byrd, John W. & Hickman, Kent A., 1992. "Do outside directors monitor managers? *1: Evidence from tender offer bids," Journal of Financial Economics, Elsevier, vol. 32(2), pages 195-221, October.
- Jonathan Jang, Hwee-Yong & Lin, Chan-Jane, 1993. "Audit quality and trading volume reaction: A study of initial public offering of stocks," Journal of Accounting and Public Policy, Elsevier, vol. 12(3), pages 263-287.
- Morck, Randall & Shleifer, Andrei & Vishny, Robert W., 1988. "Management ownership and market valuation : An empirical analysis," Journal of Financial Economics, Elsevier, vol. 20(1-2), pages 293-315, January.
- Shleifer, Andrei & Vishny, Robert W., 1989. "Management entrenchment : The case of manager-specific investments," Journal of Financial Economics, Elsevier, vol. 25(1), pages 123-139, November.
- Sloan, Richard G., 2001. "Financial accounting and corporate governance: a discussion," Journal of Accounting and Economics, Elsevier, vol. 32(1-3), pages 335-347, December.
- Shleifer, Andrei & Vishny, Robert W, 1997. " A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
- Andrei Shleifer & Robert W. Vishny, 1995. "A Survey of Corporate Governance," Harvard Institute of Economic Research Working Papers 1741, Harvard - Institute of Economic Research.
- Andrei Shleifer & Robert W. Vishny, 1996. "A Survey of Corporate Governance," NBER Working Papers 5554, National Bureau of Economic Research, Inc.
- Morck, Randall & Shleifer, Andrei & Vishny, Robert W., 1988. "Management ownership and market valuation," Scholarly Articles 29407535, Harvard University Department of Economics.
- Smith, Stephen C. & Cin, Beom-Cheol & Vodopivec, Milan, 1997. "Privatization Incidence, Ownership Forms, and Firm Performance: Evidence from Slovenia," Journal of Comparative Economics, Elsevier, vol. 25(2), pages 158-179, October.
- McConnell, John J. & Servaes, Henri, 1990. "Additional evidence on equity ownership and corporate value," Journal of Financial Economics, Elsevier, vol. 27(2), pages 595-612, October.
- Carlos Alves & Victor Mendes, 2004. "Corporate Governance Policy and Company Performance: the Portuguese case," Corporate Governance: An International Review, Wiley Blackwell, vol. 12(3), pages 290-301, 07.
- Carl Shapiro, 1983. "Premiums for High Quality Products as Returns to Reputations," The Quarterly Journal of Economics, Oxford University Press, vol. 98(4), pages 659-679.
- Hart, Oliver & Moore, John, 1995. "Debt and Seniority: An Analysis of the Role of Hard Claims in Constraining Management," American Economic Review, American Economic Association, vol. 85(3), pages 567-585, June.
- Oliver Hart & John Moore, 1994. "Debt and Seniority: An Analysis of the Role of Hard Claims in Constraining Management," NBER Working Papers 4886, National Bureau of Economic Research, Inc.
- R.M. Haniffa & T. E. Cooke, 2002. "Culture, Corporate Governance and Disclosure in Malaysian Corporations," Abacus, Accounting Foundation, University of Sydney, vol. 38(3), pages 317-349.
- Himmelberg, Charles P. & Hubbard, R. Glenn & Palia, Darius, 1999. "Understanding the determinants of managerial ownership and the link between ownership and performance," Journal of Financial Economics, Elsevier, vol. 53(3), pages 353-384, September.
- Himmelberg, C.P. & Hubbard, R.G. & Palia, D., 1997. "Understanding the Determinants of Mangerial Ownership and the Link Between Ownership and Performance," Papers 97-21, Columbia - Graduate School of Business.
- Charles P. Himmelberg & R. Glenn Hubbard & Darius Palia, 2000. "Understanding the Determinants of Managerial Ownership and the Link Between Ownership and Performance," NBER Working Papers 7209, National Bureau of Economic Research, Inc.
- Dye, Ronald A, 1993. "Auditing Standards, Legal Liability, and Auditor Wealth," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 887-914, October.
- Douglas W. Diamond, 1991. "Debt Maturity Structure and Liquidity Risk," The Quarterly Journal of Economics, Oxford University Press, vol. 106(3), pages 709-737.
- Hingorani, Archana & Lehn, Kenneth & Makhija, Anil K., 1997. "Investor behavior in mass privatization: The case of the Czech voucher scheme," Journal of Financial Economics, Elsevier, vol. 44(3), pages 349-396, June.
- repec:hrv:faseco:30728046 is not listed on IDEAS Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:eme:majpps:v:23:y:2008:i:8:p:744-778. 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: (Virginia Chapman)
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.