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Environmental, Social and Governance and the Efficiency of Government-linked Companies in Malaysia

Author

Listed:
  • Qian Long Kweh

    (Department of Accounting, College of Business and Accounting, Universiti Tenaga Nasional, Sultan Haji Ahmad Shah Campus)

  • Bakhtiar Alrazi

    (Department of Accounting, College of Business and Accounting, Universiti Tenaga Nasional, Sultan Haji Ahmad Shah Campus)

  • Yee Chuan Chan

    (Department of Accounting, College of Business and Accounting, Universiti Tenaga Nasional, Sultan Haji Ahmad Shah Campus)

  • Wan Mohammad Taufik Wan Abdullah

    (Department of Accounting, College of Business and Accounting, Universiti Tenaga Nasional, Sultan Haji Ahmad Shah Campus)

  • Ruzana Mohd Azly Lee

    (Department of Accounting, College of Business and Accounting, Universiti Tenaga Nasional, Sultan Haji Ahmad Shah Campus)

Abstract

Environmental, social and governance (ESG) are non-financial performance indicators that help determine financial performance. This study, motivated by the increasing awareness of various stakeholders about the importance of ESG disclosure, explores the impacts of ESG on firm efficiency of government-linked companies (GLCs) in Malaysia from 2006 to 2012. The ESG disclosure is based on the Sustainalytics ESG Research data available in Bloomberg while data development analysis (DEA) is used to estimate firm efficiency. This study found that GLCs focused more on governance disclosures, followed by social and environmental aspects. Governance improved firm efficiency, but social and environmental factors had no similar effects. In conclusion, this study provided insight on ESG initiatives which are useful for stakeholders when making financial and investment decisions.

Suggested Citation

  • Qian Long Kweh & Bakhtiar Alrazi & Yee Chuan Chan & Wan Mohammad Taufik Wan Abdullah & Ruzana Mohd Azly Lee, 2017. "Environmental, Social and Governance and the Efficiency of Government-linked Companies in Malaysia," Institutions and Economies (formerly known as International Journal of Institutions and Economies), Faculty of Economics and Administration, University of Malaya, vol. 9(2), pages 55-73, April.
    • Handle: RePEc:umk:journl:v:9:y:2017:i:2:p:55-73
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    Citations

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    Cited by:

    1. Chunya Ren & Irene Wei Kiong Ting & Wen‐Min Lu & Qian Long Kweh, 2022. "Nonlinear effects of ESG on energy‐adjusted firm efficiency: Evidence from the stakeholder engagement of apple incorporated," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 29(5), pages 1231-1246, September.
    2. Amar Hisham Jaaffar & Azlan Amran & Jegatheesan Rajadurai, 2018. "The Impact of Institutional Pressures of Climate Change Concerns on Corporate Environmental Reporting Practices: A Descriptive Study of Malaysia’s Environmentally Sensitive Public Listed Companies," SAGE Open, , vol. 8(2), pages 21582440187, May.

    More about this item

    Keywords

    Environmemntal; Social and Governance (ESG). firm efficiency; data envelopment analysis; government-linked companies;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M14 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - Corporate Culture; Diversity; Social Responsibility
    • H11 - Public Economics - - Structure and Scope of Government - - - Structure and Scope of Government

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