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Shareholder activism in family‐controlled firms in Malaysia

Author

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  • Siti Sakinah Azizan
  • Rashid Ameer

Abstract

Purpose - The purpose of this paper is to investigate the impact of shareholder activism led by the Minority Shareholder Watchdog Group (MSWG) on the performance of family‐controlled firms in Malaysia from 2005 to 2009. Design/methodology/approach - The paper uses event study methodology to calculate abnormal returns for the sample and control firms. Findings - The paper finds significant positive cumulative abnormal returns of at least 0.5 percent for the targeted family firms, during the event window of [−1, 0] and [0, +1], as a result of MSWG engagement. There is a significant positive cumulative abnormal return of 1 percent for the firms where family control is less than the threshold level of 33 percent. It is interesting to note that MSWG engagements do not have consistent positive impact on the abnormal returns over the years. There are significant differences between the performance of MSWG targeted family‐controlled firms and non‐targeted family‐controlled firms after one year of MSWG intervention. Research limitations/implications - The results show that MSWG‐led shareholder activism does have an effect on the share returns of the family‐controlled firms. These results imply that family‐controlled firms agree with the MSWG on those matters that improve the bottom‐line results. Originality/value - The authors argue that this is the first study to examine MSWG engagements with family‐controlled firms in Malaysia.

Suggested Citation

  • Siti Sakinah Azizan & Rashid Ameer, 2012. "Shareholder activism in family‐controlled firms in Malaysia," Managerial Auditing Journal, Emerald Group Publishing Limited, vol. 27(8), pages 774-794, August.
    • Handle: RePEc:eme:majpps:02686901211257046
    DOI: 10.1108/02686901211257046
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    Citations

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    Cited by:

    1. Josef Bajzik & Tomas Havranek & Zuzana Irsova & Jiri Novak, 2023. "Do Shareholder Activism Announcements Affect Stock Prices? A Meta-Analysis," Working Papers 2023/17, Czech National Bank.
    2. Bajzík, Josef & Havranek, Tomas & Irsova, Zuzana & Novak, Jiri, 2023. "Does Shareholder Activism Create Value? A Meta-Analysis," CEPR Discussion Papers 18233, C.E.P.R. Discussion Papers.
    3. Simon Rafaqat & Sana Rafaqat & Sahil Rafaqat & Saoul Rafaqat & Dawood Rafaqat, 2023. "Shareholder Activism and Firm Performance: A Review," Journal of Economics and Behavioral Studies, AMH International, vol. 14(4), pages 31-41.
    4. Bajzik, Josef, 2023. "Is the role of shareholder activism in corporate governance overestimated?," Finance Research Letters, Elsevier, vol. 58(PC).

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