financial performance – Jurnal Pengurusan

Corporate Sustainability Commitment, Institutional Investors and Financial Performance: Evidence from Malaysia

asriwn — Fri, 23 May 2025 03:33:08 +0000

This study examines whether corporate commitment towards sustainability contributes to financial performance and the moderating role of institutional investors toward relationship between sustainability commitment and financial performance. The monitoring role by institutional investors is also expected to be able to align sustainability practices with the company’s financial objectives. The sample includes Malaysian companies listed on the main board of Bursa Malaysia from 2015 to 2021, with a total observation of 256 companies. Data were collected from Refinitiv-Eikon Thomson Reuters. Findings indicated that higher corporate sustainability commitment (CSC) does associate with higher financial performance. In addition, the presence of institutional investors positively affects the financial performance of companies, however, weakens the effect of CSC on financial performance. This study provides insights for Malaysian regulators on the importance of sustainable practices toward value creation and achieving the 2030 Agenda for Sustainable Development. Additionally, it provides insights from the perspectives of agency theory, by which companies can create better values when their commitment towards sustainability practices is monitored by the presence of institutional investors.

Characteristics of Board and Shariah Board on Risk-Taking and Performance: Evidence from Takaful Operators in Malaysia

asriwn — Fri, 20 Sep 2024 01:34:46 +0000

This study examines how board of directors (BOD) and Shariah board (SB) characteristics influence risk-taking and performance in Malaysian Takaful operators (TOs). These operators face unique challenges when balancing financial growth with strict adherence to Shariah principles. The study analyse data from 15 TOs from 2012 to 2021, resulting in a total of 124 firm-years of observations using panel data regression techniques. The key findings are a higher proportion of women on BOD leads to less risk-taking, while larger SB with more PhD members encourage it. However, the impact on performance is mixed. More women on BOD might reduce returns on assets, while frequent BOD meetings and a highly qualified SB might lower return on equity. This research offers valuable insights, where investors should consider the risk-return trade-off when evaluating TOs based on BOD and SB composition while managers need to balance risk management with Shariah compliance by building diverse BOD and optimising SB structure. Industry regulators should promote sound governance practices and collaboration between BOD and SB. Overall, the study contributes to the corporate and Shariah governance literature, shedding light on the complex interplay between BOD composition, SB expertise, risk-taking and performance in a complex industry.

Climate Risk Disclosure and Financial Performance of High Carbon Emission Companies in China

asriwn — Wed, 28 Aug 2024 07:43:11 +0000

Unlike past studies that focus on environment, social and governance disclosure, this study aims to examine the association between climate risk disclosure (CRD) and corporate financial performance (FP). Climate-related risks are fundamentally intertwined with a company’s risks, amplifying the drive for companies to communicate these risks to stakeholders openly. This study used a sample of 1,241 annual reports of China’s high carbon emission A-share listed companies from 2013 to 2022 as samples and used the climate-related risk keywords developed by prior literature to quantitatively measure the level of the company’s disclosure of climate risk information. The empirical results indicate that CRD, which is directly related to the overall business risks, is positively associated with the three FP measurement indicators, i.e., return on assets, return on equity and Tobin’s Q. The results also passed the robustness tests. Theoretically, the results underscore the importance of stakeholder legitimacy actions in the form of CRD because it informs stakeholders’ decisions and empowers them to support sustainable business practices that could enhance company performance.

An Empirical Study of Auditors Switching, Corporate Governance and Financial Performances of Malaysian Public Listed Companies (PLCs)

Amirulilul — Tue, 11 Oct 2022 06:53:16 +0000

In the past years, regulators and the business communities had expressed worries about the alarming rate at which firms or corporations collapse due to the mismanagement and manipulation of resources as seen in the cases of Enron, WorldCom in the United States of America; and to be specific in Malaysia, the cases of Megan Media Holdings Berhad and Transmile Group. Auditor switching is evident and the disorder of auditor switching often takes place in Malaysia; however, as time goes by, it is decreasing. Thus, this paper seeks to empirically examine the effect of auditor switching and corporate governance on financial performance of Malaysian PLCs. Secondary data on a total number of 100 PLCs from years 2009 to 2013 are used. The results reveal that the effect of auditor switching on performance does not vary with duality role and the board size. However, the independent director does not cause a good firm performance. Nonetheless, auditors do not have a direct effect on financial performance since they are not directly involved with the management of the firms which negates the results of previous study. Therefore, this paper has vital impact in that regulators and the public need to be educated through awareness campaigns to emphasize on the auditors’ roles as agents in understanding the impact of the association between corporate governance and financial performance. Furthermore, auditor switching should embrace not only rotation of audit partners, but rotation of audit firms as well in view that this will help in infusing discipline from the top to the bottom of the audit firms and the companies.

Islamic Intellectual Capital and Takaful Financial Performance

apriyaliwahab — Mon, 10 Oct 2022 02:03:06 +0000

This study examines the effect of Islamic intellectual capital that consists of Structural Capital, Human Capital, and Capital Employed on takaful financial performance in Southeast Asia and the Middle East during 2016-2019. The dependent variable, takaful financial performance, is measured from the firm’s ROE. The independent variables in the current study are the Human Capital Efficiency (HCE), Structural Capital Efficiency (SCE), and Capital Employed Efficiency (CEE), and Audit Opinion used as a control variable. This study is a descriptive quantitative research using multiple linear regression analysis. The population of this study is the sharia insurance firms in Southeast Asia and Middle East countries with a total of 155 observations. This study shows that, two out of three variables are significant. Structural Capital Efficiency has a positive and significant effect, Capital Employed Efficiency has a negative and significant impact, and the Human Capital Efficiency has no significant effect on takaful financial performance. This study can be used as a reference, evaluation, and source of improvement for sharia insurance firms in optimizing the Islamic intellectual capital to improve the firm’s financial performance. To achieve this objective, companies could improve employees’ knowledge on sharia regulations, especially regarding sharia insurance, training, fulfilling employee’s rights, improving system quality, services, and transaction procedures.

Earnings Management in Malaysian Public Listed Family Firms

SITI HASLINA TON ZAINAL ABIDIN — Sat, 08 Oct 2022 18:42:22 +0000

The rise of accounting-related scandals has highlighted the prevalence of earnings management in financial markets. This paper offers empirical evidence on the motivations for earnings management in Malaysia public listed family firms. A sample of 100 family firms were randomly selected from Bursa Malaysia from the years 2010 to 2014, which resulted in 500 observations in total. The results indicate that the equity ownership held by a controlling family is associated with the earnings management in the firm, since the controlling family has greater power and rights in decision-making. However, the involvement of the controlling family as board of directors is not associated with earnings management in the family firm, since the non-executive member of the board will become the chairman to oversee and monitor the business operations of the family firm. The indirect ownership of the controlling family in family firms does not provide greater opportunity for them to manage earnings through direct equity shares held by other family members because they have limited power through indirect ownership.

The Relationship between Financial Literacy, Rational Financing Decision, and Financial Performance: An Empirical Study of Small and Medium Enterprises in Makassar

syazwinaramjan — Sat, 08 Oct 2022 13:36:01 +0000

This research analyzes the effect of Financial Literacy, Rational Financing Decision, Financial Capital, and SME Financial Performance. A survey approach is used for data collection from a sample of financed SMEs in Makassar City. Using the cluster method technique and stratified random sampling, 279 samples are obtained and analyzed with Structural Equation Modeling with the AMOS Software. The results show that Financial Literacy significantly affects Rational Financing Decision and Financial Capital. Rational Financing Decision significantly affects Financial Capital. Furthermore, Financial Literacy and Capital significantly affects performance. Moreover, Rational Financing Decision does not significantly affect Financial Performance. The study shows that Financial Capital is not a Moderator variable in explaining the relationship between Financial Literacy and Rational Financing Decision with Financial Performance. This research implies that financial institutions should be careful in providing loans to SMEs.

Debt and Financial Performance of REITs in Malaysia: A Moderating Effect of Financial Flexibility

sufizulkarnain01 — Sat, 08 Oct 2022 05:12:24 +0000

The use of debt by REITs entity seems to be a puzzle in numerous REITs literature, as REITs are tax-exempted business entities. The trade-off theory implies that the financing strategy of using debt provides no value in a REIT entity with a marginal tax rate of zero. However, high dividend pay-out requirement has limit REITs’ ability to retain its internal earnings, thus require REITs to use debt to undertake its growth strategies. This study aims to investigate the great curiosity about the debt financing decision of REITs in Malaysia (MREITs) at all given no tax shield benefit and to examine the moderating effect of financial flexibility in a relationship between debt financing and the financial performance. Using the unbalanced panel data from all MREITs for the time period between 2005 and 2014, the results of this study are consistent with the pecking order theory in explaining the MREITs debt financing decision but are less supportive of the trade-off theory on tax benefits and agency theory of free cash flow on disciplinary tools. This suggests that MREITs use debt to support the growth needs than tax motives and the high dividend pay-out requirement behaves as a “disciplinary tool,” not through the use of debt. The findings also reveal that financial flexibility plays an important role to alter the negative relationship between debt financing and financial performance to positive relationship. This study serves as a useful guide for MREITs’ managers in managing financial flexibility as it has important moderating effects on the relationship between debt financing and financial performance.