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Culture, corporate governance and analysts forecast in Malaysia

Author

Listed:
  • Effiezal Aswadi Abdul Wahab
  • Anwar Allah Pitchay
  • Ruhani Ali

Abstract

Purpose - – The purpose of this paper is to examine the relationship between Bumiputra (in reference to Malay indigenous race) directors, a proxy for culture and analysts forecast. In addition, the study investigates whether corporate governance affects that relationship. Design/methodology/approach - – The sample of this study is based on 664 firm-year observations from 193 firms during the 1999-2009 periods. The authors employ a panel least square regression with both period and industry fixed effects. The authors retrieved of analyst data from the Institutional Broker Estimate System (I/B/E/S) database while the authors hand collected the corporate governance variables. The remaining data were collected from Compustat Global. Findings - – The authors find a positive relationship between the proxy of culture, Bumiputra directors and analysts forecast error suggesting that cultural values influences the level of information in the Malaysian capital market. Research limitations/implications - – The research is dependent on the data availability from I/B/E/S database. Originality/value - – The authors extend the work of Haniffa and Cooke (2002) in investigating how cultural values influence the capital market. In addition, this is the first study that investigates culture values and the analysts forecast.

Suggested Citation

  • Effiezal Aswadi Abdul Wahab & Anwar Allah Pitchay & Ruhani Ali, 2015. "Culture, corporate governance and analysts forecast in Malaysia," Asian Review of Accounting, Emerald Group Publishing Limited, vol. 23(3), pages 232-255, September.
    • Handle: RePEc:eme:arapps:v:23:y:2015:i:3:p:232-255
    DOI: 10.1108/ARA-03-2014-0033
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    Citations

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    Cited by:

    1. Badru, Bazeet O. & Ahmad-Zaluki, Nurwati A. & Wan-Hussin, Wan Nordin, 2017. "Board characteristics and the amount of capital raised in the Malaysian IPO market," Journal of Multinational Financial Management, Elsevier, vol. 42, pages 37-55.
    2. Marziana Madah Marzuki, 2022. "Audit Committee Diversity, Analysts’ Forecast Accuracy and Earnings Management: Evidence from Malaysia," JRFM, MDPI, vol. 15(4), pages 1-27, April.
    3. Abdul Wahab, Effiezal Aswadi & How, Janice & Park, Jason & Verhoeven, Peter, 2018. "Political patronage and analysts’ forecast precision," Journal of Contemporary Accounting and Economics, Elsevier, vol. 14(3), pages 307-320.

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