Corporate expropriation from the perspective of ownership contestability and board governance in Malaysia
This thesis examines the effect of ownership contestability and board governance on corporate expropriation in Malaysia. The objective of the study is to investigate whether the presence of multiple shareholders structure and board governance have significant impact on the corporate expropriation of...
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| Format: | Thesis Book |
| Language: | English |
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| Summary: | This thesis examines the effect of ownership contestability and board governance on corporate expropriation in Malaysia. The objective of the study is to investigate whether the presence of multiple shareholders structure and board governance have significant impact on the corporate expropriation of Malaysian PLCs. Specifically, the study is directed towards identifying the effect of ownership of only controlling shareholder and board governance on corporate expropriation, the effect of ownership contestability between controlling shareholder and large shareholders; and board governance on corporate expropriation and the effect of ownership of only large shareholders and board governance on corporate expropriation. Using panel data regression, this thesis analysed listed firms in Bursa Malaysia from 2008 to 2012. The findings of this study infers that the powerful controlling shareholder who has significant control over the firm enables them to dominate the decision making process and hence increases firm's vulnerability towards corporate expropriation. It is al 0 found that the first degree of ownership contestability is ineffective to become a tool that influences the corporate expropriation. At the second degree of ownership contestability, this findings signify that the presence of two large shareholders could contest the power of controlling shareholder and produce more pressure to influence corporate expropriation. Meanwhile, at the third degree of ownership contestability, it infers that the presence offive large shareholders is ineffective in alleviating corporate expropriation. With regards to the role of board governance: board structure, board diversity and board remuneration, it can be concluded that large board size is positively influenced corporate expropriation in the setting of non-contestability of corporate ownership (LSH). In addition, the role of independent director would not effective as internal governance mechanism in setting of both non-contestability and contestability of ownership structures. Analysis on board diversity indicates that foreign board members functions as internal governance mechanism in both situations of non¬contestability of corporate ownership (LSH) and contestability of corporate ownership (CONT2 and CONT3) structures. Moreover, presence of female board member does not work at all as an internal governance mechanism in the setting of both non¬contestability and contestability of corporate ownership structure. Furthermore, contradictory finding between direct effect and interaction term generates inconclusive evidence on the relationship between board remuneration and corporate expropriation. In conclusion, contestability of ownerships appears to function efficiently as a tool to alleviate expropriation by controlling shareholder under certain extent which is at second degree of ownership contestability. |
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| Physical Description: | 247 leaves; 30 cm. |
| Bibliography: | Includes bibliographical references (p. 217-236) |