Rayenda Khresna Brahmana

Does retrenchment strategy induce family firm's value? A study from Malaysia

This paper investigated the performance of retrenchment strategy of Malaysian family firms. It followed prior research in value of diversification strategy such Lins and Servaes (2002), Fauver et al. (2004), or Lee et al. (2012), but with different strategy perspective which was retrenchment strategy. We also followed Reebs (2003) research on the performance family firms but taking Malaysia as the background of study. In short, we investigated the relationship between retrenchment and performance works in Malaysia family firms. We considered a sample of 443 Malaysia listed family companies between 2004 and 2013. Our background of study was Malaysian market, which was dominated by family firms. We documented the resulting strategy of retrenchment in family-controlled firm, which led to positive effect on financial performance and negative effect on accounting performance.

Psychological Biases Abilities on Constructing Weekend Anomaly

Even though many researchers have proposed trading behavior as the explanation of the Monday Irrationality or Day-of-the Week anomaly, yet, it has still left without empirical evidence. This research aims to investigate empirically by gauging psychological approach whereas the affection bias (weather-induced mood, and moon-induced mood), and cognition bias (attention bias, and cognitive dissonance) are the factors. Our results report that investor’s Monday irrationality is caused by those psychological biases. Employing one traditional dummy interaction model and an innovation model with market index returns and size-based portfolio returns as our constructs, we found the psychological biases are the explanations beyond the DOWA over the period of 1 January 1999 until 22 March 2010. This research found size does matter in this case as the intuitive judgment of investor plays role on investment decision. Our findings support the conclusion that psychology of investor does play important role on investment decision and resulting DOWA.

Corporate Disclosure and Cost of Equity: Case of Malaysian Listed Companies

Prior studies argue that company’s cost of capital significantly associated to the information asymmetry, and most of those research papers investigated develop countries. Malaysia, as an emerging market, offers its unique characteristic in terms of financial reporting regulation and is hugely influence by export-oriented companies. Therefore, this study purposely aims to examine whether information disclosure may affect the cost of equity capital of companies. We investigate this hypothesis by using all Malaysian listed companies excluding the finance, services, and utilities companies over 3 years period of 2010-2012. We use robust panel regression where the values are based on White robust standard errors that control for heterocedasticity errors. Overall, our findings support prior research that higher level of disclosure might discount the company’s cost of equity capital, suggesting that companies should disclose more information for better cost of capital.

The effect of white collar crime announcement on stock price performance: Evidence from Malaysian stock market

Purpose - The purpose of this paper is to investigate the connection between ethics and profitability by examining the association between published reports on white-collar crime and the share-price performance of the Malaysian-listed companies. This study aims to examine the role of white-collar crime in Malaysian-listed companies on its stock-price reaction. Design/methodology/approach - Following prior research, even study methodology is used to exploit the stock-price reaction on the white-collar crime announcement. The daily bases of average abnormal returns (AARs) and cumulative average abnormal returns (CAARs) with an event window of 90 days prior to and after the announcements are determined. This study uses public announcement data of white-collar crimes from Malaysian Securities Commission from 1996 to 2013. Findings - The finding indicates that an announcement of a white-collar crime has a negative abnormal return on the share price. As a result, the market does not react efficiently toward the information released regarding the incidence of a white-collar crime. Practical implications - This study contributes to the managerial decision theory, where managers should be able to see a definite connection between unethical behavior and their firms stock. The stockholders and policymakers should find this information important in pressing for greater corporate and managerial accountability. Originality/value - Unlike prior research, this paper investigates the stock-price performance due to white-collar crime announcement in the Malaysian context by using complete data set of announcement from 1996 to 2013.

Climate change mitigation and the cost of equity: evidence from Malaysia

This study examines the effect of Climate Change Mitigation (CCM) on the cost of equity covering 266 Malaysian public listed companies from the period between 2010 and 2014. We find that CCM has a significant effect on the cost of equity. There are corporate attributes such as a firms size, leverage, growth and risk effect on the cost of equity. However, only the leverage and risk are significant to the cost of equity. Interestingly, our research also discovered the unexpected direction for the relationship between CCM and the cost of equity, which is a positive relationship. This implies that the higher disclosure of CCM increases the cost of equity for the firms. In short, firms have to exchange to compromise between a lower cost of equity or a better environment. This research carries important findings for the policy makers. Policy makers may find that there is a trade-off between choosing to act responsibly towards the environment and achieving an optimum profit.

Does Integration Occur on a Certain Day? The Case of the Lithuanian Stock Market

Does Integration Occur on a Certain Day? The Case of the Lithuanian Stock Market This paper explores the intersection between market integration and Weekend Effect by investigating the possibility of integration to occur in a certain day over the period of 1 January 1990 until 31 December 2010. The integration was retrieved from the intercept time varying rolling regression of Stehles (1977) ICAPM Model. Meanwhile, the Weekend effect is captured by the intercept time varying rolling regression of Frenchs (1980) Monday Effect Model. For robustness, we modified the Frenchs Model to examine the seasonality inside market integration with Exchange Rate and Oil Prices as the control variable. This research remarks the seasonality of Lithuanian stock market integration.