Irene Wei Kiong Ting

INTELLECTUAL CAPITAL PERFORMANCE OF FINANCIAL INSTITUTIONS IN MALAYSIA

Purpose – This paper aims to examine the intellectual capital performance and its relationship with financial performance of financial institutions in Malaysia for the period 1999 to 2007.Design/methodology/approach – The value added intellectual coefficient (VAICTM) by Pulic is used.Findings – The paper reveals that VAIC and ROA are positively related among Malaysias finance sector. The results also show that the three components of VAIC are associated with profitability with the explanatory power of 71.6 per cent.Research limitations/implications – This study does not cover all finance companies in Malaysia due to limited data. Future study should therefore further improve on the aspect of coverage.Practical implications – The findings may serve as a useful input for bankers to apply knowledge management in their institutions. Furthermore, the financial institutions may have more definite understanding of the composition of intellectual capital and evaluate its developing tendency periodically.Original...

Measuring intellectual capital efficiency in the Malaysian software sector

Purpose – The purpose of this paper is to investigate the efficiency of Malaysian public‐listed software companies in transforming intellectual capital (IC) into corporate values by using the data envelopment analysis (DEA) methodology.Design/methodology/approach – The authors use three individual components of value added intellectual coefficient (VAIC™) as the input variables, and Tobins Q and return on equity (ROE) as the output variables.Findings – Examining a sample of 25 companies, findings of this study show that companies listed on the main market of Bursa Malaysia are less efficient than those listed on the ACE market. Among the sample companies, Eduspec Holdings Berhad, which falls in the “stars” zone, is the most efficient company with the highest frequency of reference. The results remain robust despite the criticism about the validity of VAIC™ as an IC indicator.Practical implications – The benchmarking analysis of this study may shed light for the managers in software companies to benchmark...

DOES GOVERNMENT OWNERSHIP MATTER? COMPARATIVE STUDY BETWEEN GLCS AND NGLCS IN MALAYSIA

This study investigates whether government participation in firm ownership leads to better firm performance of publicly listed companies in Malaysia. The sample covers 257 companies listed on the Bursa Malaysia from 1997 to 2009. Multiple regression models with balanced panel data are used to examine the impact of government ownership (GOVN) on firm performance. We find a negative relationship between GOVN and firm performance, a finding that supports the negative public perception of government-linked companies (GLCs) in Malaysia. We conclude that government ownership is not an effective tool for improvement of firm performance in Malaysia.

Corporate diversification and efficiency: evidence from Taiwanese top 100 manufacturing firms

Abstract For at least the last two decades, diversification has been an important issue in the strategic management research. This paper explores how diversification affects the corporate performance of the top 100 manufacturing companies in Taiwan, which were selected based on a ranking survey of Taiwanese manufacturing firms conducted by Common Wealth Magazine in 2014. This paper adopts a dynamic data envelopment analysis model to estimate efficiency in the first stage, and adopts OLS regression analysis in the second stage from 2009 to 2013. Two proxies, namely the Entropy approach and the Herfindahl–Hirschman Index, are used to proxy for diversification. The results indicate that diversification has positive impacts on dynamic efficiency, after controlling firm-specific factors. Concisely, this study empirically proves that diversification is an important corporate strategy for improving corporate performance over long-term periods. Overall, “putting eggs in various baskets” enable companies to not only survive, but also sustain competitive advantage in today’s challenging business world.

Dynamic network performance evaluation of general insurance companies: an insight into risk management committee structure

Nowadays, insurance companies are operating in a challenging and borderless business world. They should focus on improving their competitive advantages to secure increased profits and reduced costs. As fundamental elements of total quality management, performance measurement and risk management play important roles in ensuring sustainable operation. This study investigates the relationship between risk management committee structure and the operating efficiency of general insurance companies operating in Malaysia for the period 2008–2013. First, this research applies the dynamic network data envelopment analysis methodology, decomposing the typical two-stage operating process of general insurance companies. That is, we estimate the marketing efficiency and profitability efficiency. We find that the sample companies have to first improve their marketing efficiency, and then proceed to improve their profitability efficiency. Second, this study applies truncated regression to test the impact of risk management committee structure on general insurers’ operating efficiency. In todays business world, general life insurance companies have to manage risks well to gain a competitive advantage.

Estimating Dynamic Panel Model of Leverage Decision: Evidence from Malaysia

Abstract This study investigates the impact of dynamic relationship by the presence of a lagged leverage decision (LEVEt-1) to leverage decision. Dynamic panel model is developed to identify the possible effect of previous leverage decision on leverage adjustments speed of publicly listed companies in Malaysia for the period of 2004-2013. The dynamic panel results show that Malaysian public listed companies adjust debt and the speed of adjustment is approximately 21% to 26% per annum (System Generalized Method of Moments). This indicates that Malaysian public listed firms adjust their leverage and change their financing following temporary deviations from target in order to return leverage towards its optimum. This study contributes to firm leverage decisions by estimating the mean reversion towards target which is absent specifically in Malaysia context. Critically, the results of this study pave the way for a more advanced and mixed method approach to firm leverage decision in Malaysia.

How Do Ownership Concentration and Family Control Affect R&D Investments? New Evidence from Taiwan: Ownership Concentration and R&D Investments

This study finds a nonlinear relationship between ownership concentration and RD the relationship becomes negative when ownership concentration is at a high level. However, the impact of ownership concentration on RD that is, family control moderates the relationship between ownership concentration and R&D investments. Overall, this study suggests that the ownership concentrations nonlinear impact on R&D investments differs between family‐controlled firms and nonfamily‐controlled firms.

CAPITAL STRUCTURE AND DYNAMIC PERFORMANCE: EVIDENCE FROM ASEAN-5 BANKS

In today’s dynamic economy, banks should focus on improving their dynamic performance to stay competitive. Using a dataset for the period 2007–2013, this paper evaluates the dynamic performance of ASEAN-5 banks through a data envelopment analysis (DEA) model, called the dynamic slacks-based measure (DSBM) model. The DEA results indicate that banks in Malaysia perform better than those in Singapore, Thailand, Indonesia and the Philippines. Frontier projections through DEA indicate that banks in the ASEAN-5 countries underutilize their long-term assets, resulting in inefficiencies. Furthermore, this study finds that capital structure as a whole is positively related to bank performance.

The Relationship between Corporate Governance and Expropriation of Minority Shareholders’ Interests☆

Abstract This study empirically examines the relationship between corporate governance and expropriation of minority shareholders’ interests Malaysian firms. Using a sample of 73 companies that are screened from the top 100 companies in Malaysia, this study runs multivariate analysis to assess whether minority shareholders’ interests are protected by corporate governance mechanism in a company. The results of this study shows that audit committee independence would help reduce the tunneling and/or propping activities in a company. Besides, a company is suggested to have its positions of CEO and Chairman being held by two different persons. In the analysis, this study also controls for several corporate governance variables such as board size as well as CEOs and/or Chairmans financial expertise. In summary, investors may refer to the outcome of this study in making their investments, whereby they are recommended to obtain some information on board mechanisms of a company.

Managerial overconfidence, government intervention and corporate financing decision

Purpose - – The purpose of this paper is to investigate the impact of managerial overconfidence on corporate financing decision and the moderating effect of government ownership on the relationship between managerial overconfidence and corporate financing decision. Design/methodology/approach - – Pooled OLS, fixed effect models (FEM), and Tobit regressions are employed to examine the relationship between managerial overconfidence, government ownership and corporate financing decision of publicly listed companies in Malaysia for the period of 2002-2011. Findings - – The authors conclude that: first, CEO overconfidence is significantly and negatively related to corporate financing decision; second, a higher degree of managerial overconfidence would result in lower leverage in GLCs, whereas the effect does not significantly exist in NGLCs; third, a larger ownership of government in a firm will reduce the negative effect of managerial overconfidence on corporate financing decision; fourth, the moderating effect of government ownership on the association between managerial overconfidence and corporate financing decision in GLCs is more effective than NGLCs; and fifth, government intervention plays its role as moderating effect on the relationship between managerial overconfidence and corporate financing decision in firms with lower ownership concentration but not in firms with high ownership concentration (more or equal than 50 percent). Practical implications - – The finding implies that the moderating effect of government ownership on the association between managerial overconfidence and corporate financing decision in GLCs is more effective than NGLCs. Originality/value - – The authors make the first attempt to test the moderating effect of government ownership on the relationship between ownership concentration and corporate financing decision.