firm performance – Jurnal Pengurusan

Digital Financial Literacy, Financial Inclusion, and SME Performance in Malaysia: Evidence from Threshold Regression

asriwn — Mon, 17 Nov 2025 07:35:58 +0000

This study examines the effect of digital financial literacy on firm performance among selected small and medium-sized enterprises (SMEs) in Malaysia. The level of digital financial literacy is measured as a percentage, based on firm’s understanding or knowledge, experience, awareness of potential risks, and skills. The level of financial inclusion for each firm, as the threshold variable, is calculated using a newly constructed firm-level financial inclusion index. The relationship between digital financial literacy and firm performance is subsequently estimated using a cross-sectional threshold regression technique. The main findings reveal the digital financial literacy-performance nexus is contingent on the level of financial inclusion, indicating that digital financial literacy exhibits a non-monotonic positive effect on firm performance. The positive effect is evident at high and low levels of financial inclusion. These findings should motivate policymakers in Malaysia to exert greater efforts to raise awareness of digital financial literacy as a means of supporting sustainable firm performance. The utilization of digital plays a crucial role in mitigating and facilitating SMEs’ access to , thereby enhancing firm performance.

Board of Directors’ Tenure and Firm Performance: Evidence from Malaysia

asriwn — Wed, 16 Jul 2025 06:37:08 +0000

Considering the prevalence of government-linked and family-owned firms in Malaysia, as well as recent financial scandals, understanding how board directors’ tenure affects firm governance and performance is crucial. Therefore, this paper examined the impact of director tenure on firm performance in Malaysia, focusing on four types of directors: chairman, executive director, independent director, and affiliated director. Drawing on Agency Theory and Resource Dependence Theory, we analyzed data from the top 300 non-financial firms listed on the Main Board of Bursa Malaysia from 2017 to 2019, using ROE, ROA, and Tobin’s Q as indicators of performance. Our findings show a significant positive association between chairman tenure and all three firm performance measures. In contrast, the tenure of independent and affiliated directors is negatively associated with Tobin’s Q, while executive directors’ tenure is not statistically significant for any performance measure. These findings highlight the varying effects of director tenure on governance and firm outcomes. This study offers important insights for academics, policymakers, and practitioners, particularly regarding the need for regulatory reforms. We recommend that regulators, such as Bursa Malaysia and Securities Commission Malaysia, reassess and tighten the definitions and tenure limits for independent and affiliated directors to strengthen board independence and enhance governance quality.

Board Characteristics and Financial Performance: Evidence from Bursa Malaysia Financial Times Stock Exchange (FTSE) Top 100 Index Firms

asriwn — Thu, 15 Aug 2024 02:28:56 +0000

Research on the relationship between corporate governance and firm financial performance in Malaysia is inconclusive, and only covers the period before the implementation of Malaysian Code on Corporate Governance (MCCG) 2017. Therefore, this study examines the relationship between corporate governance and the financial performance of 80 non-financial firms listed on the Financial Times Stock Exchange (FTSE)Bursa Malaysia Top 100 Index between the years of 2018 and 2020. The descriptive statistics reveal that on average, the 23% composition of female directors on the board is still below the recommended MCCG 2017 and 2021 threshold of 30%. The small percentage of politically-connected directors (19%) and military-experienced directors (5%) reported in this study can be viewed favourably in line with the recent MCCG 2021 recommendation that the appointment of the directors should be apolitical or politically neutral without having any executive powers in politics. In addition, the multiple regression results indicate that board size and board meeting frequency are negatively related to firm financial performance. Female directors show a positive and significant relationship with firm financial performance. However, the effects of board independence, board alumni, board financial expertise, politically-connected directors, and military-experienced directors on firm financial performance, are insignificant. This study is beneficial to academicians, policymaker/regulators, and firm managers, in considering the contributions of corporate governance mechanisms to large listed companies’ financial performance, particularly in an emerging market.

Hubungan Saling Pengaruh Lembaga Pengarah dan Prestasi Firma: Perspektif Rangkaian Sosial

Faris A181711 — Wed, 12 Oct 2022 01:41:07 +0000

Interlocking or shared directorship is among important issues in corporate governance. According to resource dependence theory, interlocking directorship can become resources that can improve firm performance. This explanation is in line with business environment in Malaysia that can be categorized as networked economy. On the other hand, interlocking directorships can also be related to social cronyism that can have negative impacts on firms. As such, an investigation should be made to examine these conflicting arguments on interlocking directorships. In particular, different than prior research, this study aims at examining the influence of interlocking directorship patterns and the impact of interlocking directorship’s concentration on firm performance. Using 240 firm-years data of technology firms listed on the Main and ACE Markets, the results of tests reveal that interlocking non-executive directorships and interlocking directorship’s concentration did not influence firm performance. Nonetheless, the result also suggests that interlocking executive directorships have negative impact on performance. This result proves that executive directors who are also directors of other firms are in the position that may increase the risk of conflict of interests. In line with social capital explanation, the findings support prior literature on cronyism in directors’ networking.

Gender, Ethnic and Age Diversity of the Boards of Large Malaysian Firms and Performance

apriyaliwahab — Tue, 11 Oct 2022 02:02:43 +0000

Board diversity is important especially in countries which practice a one-tier board system, such as Malaysia. Under the system, board appointments are usually controlled by the firm’s substantial shareholders, and as a result, directors are chosen based on “the old-boy” network or “people like us”, who are typically middle-aged males and from similar ethnicity which could lead to “group think”. Board diversity ensures breadth and depth of the board’s judgments. To this end, this study examines board diversity of the top 100 non-financial Malaysian firms, specifically directors’ gender, ethnicity and age and their effects on firm performance. Data are collected from the 2007 annual reports of the sample firms. The evidence indicates the lack of diversity of the Malaysian boards of directors. Results from the multivariate analyses reveal that gender diversity is negatively associated with Tobin’s q and ROA. Age diversity is found to be negatively related to ROA. Ethnic diversity, on the other hand, is found to be positively associated with ROA. Hence, findings on the effect of board diversity and firm performance are mixed. Nevertheless, this study offers insights to policy makers in enhancing corporate governance in Malaysia where diversity is one of the areas that could strengthen the effectiveness of the board.

Internal Determinants of Share Price Movements among Listed Companies in Nigeria: Does Gender Diversity in Boardroom Matter?

amrularshad — Sun, 09 Oct 2022 12:54:27 +0000

This study focused on ascertaining the value relevance of gender diversity in determining share price movements among listed firms by obtaining evidence from a notable Sub-Saharan African (SSA) country – Nigeria. Panel data were collated from companies’ annual reports for 6 years covering 2012 – 2017. In estimating the models formulated to test the postulated hypotheses, the multiple regression technique was applied along with the fixed and random effect analyses. On a general note, findings indicate that the level of gender diversity in corporate boards are value relevant in determining movements in share prices since they have strong and positive effect on variations in share prices of listed firms. We therefore recommend amongst others, the passage and enforcement of legislations by the relevant and appropriate authorities and organs of regulatory controls in Nigeria, requiring all corporate boards to have a minimum proportion of female presence in their respective boardrooms. Overall, the outcome of this study contributes to existing body of empirical knowledge on the statistical link between movements in the prices of companies’ stocks and boardroom gender diversity.

The Effect of Enterprise Risk Management on Firm Value: Evidence from Malaysian Technology Firms

sufizulkarnain01 — Sat, 08 Oct 2022 17:06:24 +0000

This paper aims to examine the relationship between ERM and firm value in Malaysia. In the past literature, ERM had been argued to increase firm value but empirical evidence shows mixed and inconclusive results. Using sample from 2004 to 201 2, this paper furthers the analysis on the relationship between ERM and firm performance among technology firms in Malaysia. Indeed, technology industry is the fastest growing and a volatile industry, which requires continuous innovation. These make technology firms more prone to risk exposure. In analyzing this issue, dynamic panel data is employed to allow cross-sectional and time series analysis. Our results show that the implementation of ERM in the previous year has strong negative relationship with firm value at 1 percent significance level. It supports the argument that the effect of ERM is not immediately realized as well as entails high implementation cost. The findings provide useful input and insight in formulating new policy in relation to corporate governance, particularly ERM in Malaysia.

Multiple Directorships and the Monitoring Role of the Board of Directors: Evidence from Malaysia

syazwinaramjan — Sat, 08 Oct 2022 15:00:18 +0000

This study aims to examine the relationship between multiple directorships and the monitoring role of the board of directors in Malaysian listed companies (PLC). The monitoring role is proxied by the percentage of directors’ attendance in board meetings, as attending meetings provides directors with resources about the management actions and assists directors to exercise their role effectively. The study uses a sample of 1023 directors from 134 companies on the Main Market of Bursa Malaysia (Malaysian Bourse) in year 2008. The results of the study show that the incidence of multiple directorships is low. Independent directors are found to have more multiple directorships. Directors with multiple directorships are older directors, have less director ownerships and are on boards with a high fraction of independent directors. Based on the 75% cut-off for the percentage of meetings’ attendance, the logistic regression suggests that no agency cost is associated with multiple directorships. However, the tendency to be absent from board meetings is associated with the high number of board meetings whilst the tendency to attend more board meetings is associated with the increase in age, tenure, and director ownership.

“Doing Well” by “Doing Good”? Evidence from Tourism-Related Firms in Four South Asia Countries

Nur_161 — Sat, 08 Oct 2022 14:06:38 +0000

This study explores the corporate giving and financial performance nexus in tourism-related firms from four South Asia countries. Specifically, this study investigates if there exists an inverse U-shaped link between corporate giving and financial performance and assesses the potential bi-directional relationship between these two variables. Results generated from system-GMM estimator reveal that the effects of corporate giving on both ROA and Tobin’s Q are curvilinear. In particular, an inverse U-shaped relationship is observed, implying that firms are rewarded for their corporate giving engagement, which denotes “doing-good” leads to “doing well,” within a certain limit. Interestingly, this study also finds evidence that the firms which perform well financially are shown to engage less in corporate giving. Specifically, “doing-well” firms are shown to lead to lower level of “doing good,” supporting the management opportunity hypothesis. This study has policy implications in pushing for further CSR initiatives in other industries and emerging markets.

Does Innovation Affect the Firm Performance in Developing Countries? A Conceptual Framework

syazwinaramjan — Sat, 08 Oct 2022 13:54:27 +0000

The main objective of the paper is to explore the relationships between innovation, entrepreneurial orientation (EO), organizational culture (OC), strategic orientation (SO) and firm performance (FP). Based on the literature review, a conceptual model has been developed of the relationships between variables. This study was greatly motivated by the inconsistent findings and the gaps indicated in the contemporary literature regarding those relationships that have not been developed together within the context of developing countries. This study adopted the resource-based view and contingency theory as an underpinning theory for its assumptions and to develop the theoretical model for this study. To explore the mediating impact of innovation on the relationship between EO, OC, SO and FP in emerging countries. The originality of the article is that it offers valuable implications for different types of firms thus to provide an understanding of the relationship between EO, OC and SO and innovation to introduce innovative processes and products as well as to boost FP.