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Ownership Structure and Intellectual Capital Performance in Malaysia

Author

Listed:
  • Norman Mohd Saleh

    (Graduate School of Business, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia)

  • Mara Ridhuan Che Abdul Rahman

    (School of Accounting, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia)

  • Mohamat Sabri Hassan

    (School of Accounting, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, 43600 UKM Bangi, Selangor, Malaysia)

Abstract

The performance of intellectual capital (IC) depends on the efficiency of investments in tangible and intangible resources devoted to value creation activities. The performance of IC investments is important because it affects a company's long term competitive advantage. This paper examines whether ownership structure (whether it is management, foreign, government or family ownership) can explain the variation in a company's IC performance. It provides additional insight into the role and incentives of firm owners and could affect the company's ability to increase value (value creation activities). This research relies on an empirical model using VAICTM to measure IC performance. The data consists of all companies listed on the Malaysian Exchange of Securities Dealing and Automated Quotation Market (MESDAQ) market in between 2005 and 2007. Family ownership appears to have a negative effect on IC performance. A high degree of family ownership implies a high probability of opportunistic behaviour among families pursuing their objectives at the expense of value creation activities. The results are valuable for capital market regulators in monitoring the efficiency of value creation investments.

Suggested Citation

  • Norman Mohd Saleh & Mara Ridhuan Che Abdul Rahman & Mohamat Sabri Hassan, 2009. "Ownership Structure and Intellectual Capital Performance in Malaysia," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 5(1), pages 1-29.
    • Handle: RePEc:usm:journl:aamjaf00501_1-29
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    Citations

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    Cited by:

    1. Redhwan Ahmed al-Dhamari & Ku Nor Izah Ku Ismail, 2013. "Governance Structure, Ownership Structure and Earnings Predictability: Malaysian Evidence," Asian Academy of Management Journal of Accounting and Finance (AAMJAF), Penerbit Universiti Sains Malaysia, vol. 9(1), pages 1-23.
    2. Dhasmana, Samriddhi & Goel, Sandeep, 2023. "The insidious hyperreality in financial markets: An integrative review with evidence from the Indian financial market," International Review of Financial Analysis, Elsevier, vol. 90(C).
    3. Vincenzo Scafarto & Federica Ricci & Elisabetta Magnaghi & Salvatore Ferri, 2021. "Board structure and intellectual capital efficiency: does the family firm status matter?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 25(3), pages 841-878, September.
    4. Lim, Mable & How, Janice & Verhoeven, Peter, 2014. "Corporate ownership, corporate governance reform and timeliness of earnings: Malaysian evidence," Journal of Contemporary Accounting and Economics, Elsevier, vol. 10(1), pages 32-45.
    5. Muhammad Madyan & Iksan Abdi Nugraha & Wisudanto Wisudanto & Rahmat Setiawan & Novian Abdi Firdausi, 2022. "Building firm value and financial performance through intellectual capital: the Indonesia stock exchange's experience," Economics Bulletin, AccessEcon, vol. 42(2), pages 294-302.
    6. Giovanni Bronzetti & Stefania Veltri & Romilda Mazzotta, 2016. "Editorial: Is There Still Something to Learn about the Association of Corporate Governance with Firm Performance?," International Journal of Business and Management, Canadian Center of Science and Education, vol. 11(10), pages 306-306, September.
    7. Muhammad Wasim Jan Khan, 2014. "A Critical Review of Empirical Studies in Intellectual Capital Literature," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 4(11), pages 159-176, November.
    8. Li, Huajiao & An, Haizhong & Fang, Wei & Wang, Yue & Zhong, Weiqiong & Yan, Lili, 2017. "Global energy investment structure from the energy stock market perspective based on a Heterogeneous Complex Network Model," Applied Energy, Elsevier, vol. 194(C), pages 648-657.
    9. Bharathi Kamath, 2019. "Impact of corporate governance characteristics on intellectual capital performance of firms in India," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 16(1), pages 20-36, March.
    10. Quan Tran & Anh‐Tuan Doan & Thao Tran, 2021. "Small and medium enterprises' credit access, ownership structure and job development," Australian Economic Papers, Wiley Blackwell, vol. 60(4), pages 710-735, December.

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