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Corporate Performance and Governance in Malaysia

Author

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  • Mr. Luc E. Leruth
  • Mr. Yougesh Khatri
  • Ms. J. Piesse

Abstract

This paper measures corporate sector performance (efficiency) and empirically examines the role of corporate governance. A stochastic frontier with inefficiency effects is fitted to a panel dataset of 31 of the largest nonfinancial companies listed on the Kuala Lumpur Stock Exchange for the period 1995 to 1999. Focusing specifically on the impact of the system of corporate governance and the level of control on firm-level performance, results show an underlying vulnerability in these firms, exacerbated by their reliance on bank-based borrowing and a highly concentrated shareholding structure with complex cross holdings. Furthermore, debt does not appear to have the control features present in outsider systems of corporate governance.

Suggested Citation

  • Mr. Luc E. Leruth & Mr. Yougesh Khatri & Ms. J. Piesse, 2002. "Corporate Performance and Governance in Malaysia," IMF Working Papers 2002/152, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2002/152
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    References listed on IDEAS

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    Cited by:

    1. Irfah Najihah Basir Malan & Norhana Salamudin & Noryati Ahmad, 2013. "Ownership and Control Divergence on Firm Value," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 4(1), pages 78-85, January.
    2. Crama, Yves & Leruth, Luc, 2007. "Control and voting power in corporate networks: Concepts and computational aspects," European Journal of Operational Research, Elsevier, vol. 178(3), pages 879-893, May.
    3. Mr. Se-Jik Kim, 2003. "Macro Effects of Corporate Restructuring in Japan," IMF Working Papers 2003/203, International Monetary Fund.
    4. Yves Crama & Luc Leruth, 2013. "Power Indices And The Measurement Of Control In Corporate Structures," International Game Theory Review (IGTR), World Scientific Publishing Co. Pte. Ltd., vol. 15(03), pages 1-15.
    5. Crama, Yves & Hübner, Georges & Leruth, Luc & Renneboog, Luc, 2021. "Identifying Ultimate Beneficial Owners : A Risk-Based Approach to Improving the Transparency of International Financial Flows," Discussion Paper 2021-027, Tilburg University, Center for Economic Research.
    6. Mohd Rashdan Sallehuddin & Nor Azrin Mohamad Rosli, 2019. "Corporate Governance and Performance: Evidence from Industrial Product and Service Sector in Bursa Malaysia," International Journal of Science and Business, IJSAB International, vol. 3(6), pages 87-98.
    7. Pik Kun Liew, 2007. "Corporate Governance Reforms in Malaysia: the key leading players' perspectives," Corporate Governance: An International Review, Wiley Blackwell, vol. 15(5), pages 724-740, September.

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