Nor Aziah Abdul Manaf

Validating a second-order model for oil and gas projects’ investment climate scale

Purpose The investment climate is one of the key factors considered by foreign investors while deciding their investment destination. This paper aims to attempt at validating the second-order model of oil and gas projects’ investment climate. Examination of the relationship between the dimensions of oil and gas projects’ investment climate; strategy, participants/operating environment and risk/return; and the overall latent construct was conducted. The study also evaluates the goodness of fit of the second-order model using relevant fit indices. Design/methodology/approach Oil and gas experts in Malaysian marginal oil fields subsector were deployed, through whom responses were collected that formed the data set used in the analysis. Then, the data were used for confirmatory factor analysis, evaluation of the second-order model through path analysis and for model fit evaluation. Findings The finding revealed that the second-order model of oil and gas projects’ investment climate is valid and reliable. It also revealed that all the three dimensions, strategy, participants/operating environment and risk/return, have significant effects on the formation of the oil and gas projects’ investment climate. Finally, the goodness of fit of the second-order model satisfied the relevant fit indices. Research limitations/implications The findings present valuable insights to policymakers on the extent of the influence each of the dimensions has on the overall latent construct. The validity and reliability analysis suggests the measurements of the second-order model of oil and gas projects’ investment climate construct, and its dimensions are valid, reliable and fit for future empirical research. Thus, it calls for replication in other oil and gas settings. Originality/value The findings from the results of this study are pioneering. Extant literature falls short in attempting the validation of the second-order oil and gas projects’ investment climate scale, as well as relating each of the dimensions with the overall latent construct.

Board of directors and corporate diversification in Malaysia

This study provides evidence on corporate diversification in Malaysia. The attributes of board: board composition, board characteristic, board structure and board process are examined in focused and diversified companies. The board attributes are also tested to examine the relationship with corporate diversification level. With exception to board size and duality leadership structure, the practices of board attributes are not shown to be different in focused and diversified companies. In terms of relationship, only proportion of executive directors is found to have significant correlation with diversification level [measured by number of segments based on two-digit SIC and Herfindahl index (asset)]. Overall, the findings show that not all board governance attributes differ in corporate diversification status and level. The board effectiveness in monitoring corporate diversification is still unclear as diversification is not necessarily an inefficient strategy although it might be used for the benefit of decision agent.