Corporate governance and firm performance in Malaysia

Padmanabha Ramachandra Bhatt · R. Rathish Bhatt

205 citations0/0 files storedCorporate Governance

No readable copy stored yet — this record is metadata only.

No open-access location is known for this record yet.

Literature note Cite in a project Citation map

Corporate Finance and Governance Corporate Governance and Law Corporate Governance and Financial Management

Abstract

Purpose The purpose of this paper is to study the effect of Malaysian Code on Corporate Governance (MCCG, 2007 and 2012) on the performance of the listed companies in Malaysia. The agency theory and resource dependency theories indicate that the firms with strong corporate governance outperform firms with weaker governance. This paper explores this relationship in a developing country like Malaysia having different institutional environment compared to western countries. Design/methodology/approach The study used a sample of 113 listed companies in Malaysia. The study incorporates the endogenous relationship between corporate governance, firm performance and leverage. Findings The study analyzes how the corporate governance framework affected firm performance in Malaysia with the help of self-developed corporate governance index (MCGI). The authors’ findings show that the performance of the firm is positively and significantly related with corporate governance measured by MCGI. Secondly, corporate governance of sample firms shows marked improvements after implementation of MCCG 2012 as compared to MCCG 2007. Originality/value The findings of this paper support the agency and the resource dependency theories. The study contributes to the understanding of the relationship between the corporate governance and firm performance in emerging economy and builds a case for enforcement of strong corporate governance code by government agencies.

Paper brief

Loading…

Cite this work

Citation unavailable for this work.

BibTeX RIS CSL-JSON

No public copy is stored for this record, so only the metadata is cited.

Citations in this library

Citation map →

Stored only when both papers are in the corpus — 205 citations exist upstream.

References

1976Theory of the firm: Managerial behavior, agency costs and ownership structure 1991Institutions, Institutional Change and Economic Performance 1983Separation of Ownership and Control 1986Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers 1997A Survey of Corporate Governance 1989Agency Theory: An Assessment and Review 1985The Structure of Corporate Ownership: Causes and Consequences 2003Corporate Governance and Equity Prices

Cited by

2021Corporate governance and firm performance: empirical evidence from Jordan 2022Environmental, social and governance impact on financial performance: evidence from the Levant countries 2019Corporate governance mechanisms and firm performance: evidence from the emerging market following the revised CG code 2022The development of corporate governance literature in Malaysia: a systematic literature review and research agenda 2019The mediating role of innovation between corporate governance and organizational performance: Moderating role of innovative culture in Pakistan textile sector

Explore the map →

Papers that cite the same references — the relational fallback while embeddings are still backfilling.

Imported from OpenAlex (CC0) — nothing here is generated.