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Estimating the Value of Political Connection to Malaysia’s Richest Tycoon Companies

Author

Listed:
  • Wan Sallha Yusoff
  • Mohd Fairuz Md. Salleh
  • Azlina Ahmad
  • Fazli Idris

    (Universiti Malaysia Perlis, Malaysia)

Abstract

This study investigates the effect of direct political connection on the firm value of Malaysia’s top richest tycoon companies. We hypothesize that the wealthiest people are likely to hedge their political bets and are poorly related to direct political connections, which in turn conceal the direct political effect on firm value. The empirical evidence provides credence to this idea; in cases where the majority of the shares are controlled by “peripheral capitalism,” only government ownership has a positive and highly significant effect on the financial value of a firm. Meanwhile, the presence of politicians on board has a negative and low significant effect on the financial value of a firm. Results suggest the possibility of an indirect political connection among Malaysia’s top richest tycoon companies; the results also fit into the ongoing debate on estimating the value of political connection.

Suggested Citation

  • Wan Sallha Yusoff & Mohd Fairuz Md. Salleh & Azlina Ahmad & Fazli Idris, 2015. "Estimating the Value of Political Connection to Malaysia’s Richest Tycoon Companies," Journal of Developing Areas, Tennessee State University, College of Business, vol. 49(5), pages 87-100, Special I.
    • Handle: RePEc:jda:journl:vol.49:year:2015:issue5:pp:87-100
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    Cited by:

    1. Xuefang Xie & Xuemei Xie & Carla Martínez-Climent, 2019. "Identifying the factors determining the entrepreneurial ecosystem of internet cultural industries in emerging economies," International Entrepreneurship and Management Journal, Springer, vol. 15(2), pages 503-522, June.
    2. Hassan, M. Kabir & Karim, Md. Sydul & Kozlowski, Steven E., 2022. "Implications of public corruption for local firms: Evidence from corporate debt maturity," Journal of Financial Stability, Elsevier, vol. 58(C).
    3. Zhipeng Zang & Qiwei Zhu & Helena Mogorrón-Guerrero, 2019. "How Does R&D Investment Affect the Financial Performance of Cultural and Creative Enterprises? The Moderating Effect of Actual Controller," Sustainability, MDPI, vol. 11(2), pages 1-19, January.

    More about this item

    Keywords

    Business elites; firm value; Intellectual Capital; political connection; Top Tycoons;
    All these keywords.

    JEL classification:

    • P1 - Political Economy and Comparative Economic Systems - - Capitalist Economies
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance
    • M40 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - General

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