Stock market reaction of political connections surrounding 2018 Malaysian general election

The aim of this study is to examine the relationship between politically connected firms (PCON), types of PCON (patronage, clientelism, nepotism, cronyism and Bumiputra ownership), the age of the PCON and stock market reactions surrounding the 2018 Malaysian General Election (GE). Analyses were cond...

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Main Author:	Arina Rus Zahira, Rusli
Format:	Thesis
Language:	eng eng eng
Published:	2022
Subjects:	HF5001-6182 Business JA Political science (General)
Online Access:	https://etd.uum.edu.my/10730/1/permission%20to%20deposit-embargo%2084%20months-s903089.pdf https://etd.uum.edu.my/10730/2/s903089_01.pdf https://etd.uum.edu.my/10730/3/s903089_02.pdf
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id	my-uum-etd.10730
record_format	uketd_dc
spelling	my-uum-etd.107302023-11-05T02:36:00Z Stock market reaction of political connections surrounding 2018 Malaysian general election 2022 Arina Rus Zahira, Rusli Shafie, Rohami Malik @ Malek, Mazrah College of Business (COB) College of Business HF5001-6182 Business JA Political science (General) The aim of this study is to examine the relationship between politically connected firms (PCON), types of PCON (patronage, clientelism, nepotism, cronyism and Bumiputra ownership), the age of the PCON and stock market reactions surrounding the 2018 Malaysian General Election (GE). Analyses were conducted by utilising data from firms listed on Bursa Malaysia. The Ordinary Least Squares (OLS) regression method was used to test the hypotheses. Based on the efficient capital market theory, Bursa Malaysia is deemed as a semi-strong efficiency market since the Malaysian stock market adjusted efficiently to the news of Barisan Nasional being defeated for the first time in the 2018 Malaysian GE. The political uncertainty theory indicated that firms were severely affected when exposed to high uncertainties of the government in power. Thus, significantly negative abnormal returns were experienced by PCON, while non-PCON showed significantly positive abnormal returns. The market also reacted significantly and negatively to types of PCON, such as patronage firms and clientelism firms. Furthermore, no significant differences were found between cronyism, nepotism, Bumiputra ownership, older PCON and stock market reactions. Further analysis using a non-parametric test showed that PCON types, such as patronage, clientelism and Bumiputra ownership firms contributed to a significantly negative stock market reaction. This indicates that these types of firms were statistically lower stock market reaction than non-PCON. Further analyses generated a unique list of PCON related to the main political figures namely, Mahathir, Daim and Anwar, by refining and extending previous studies based on Malaysia's changing political scene. The outcomes of these studies may assist regulators, investors and PCON in managing their relationships with and in the stock markets. 2022 Thesis https://etd.uum.edu.my/10730/ https://etd.uum.edu.my/10730/1/permission%20to%20deposit-embargo%2084%20months-s903089.pdf text eng 2030-07-31 staffonly https://etd.uum.edu.my/10730/2/s903089_01.pdf text eng 2030-07-31 staffonly https://etd.uum.edu.my/10730/3/s903089_02.pdf text eng public other doctoral Universiti Utara Malaysia
institution	Universiti Utara Malaysia
collection	UUM ETD
language	eng eng eng
advisor	Shafie, Rohami Malik @ Malek, Mazrah
topic	HF5001-6182 Business JA Political science (General)
spellingShingle	HF5001-6182 Business JA Political science (General) Arina Rus Zahira, Rusli Stock market reaction of political connections surrounding 2018 Malaysian general election
description	The aim of this study is to examine the relationship between politically connected firms (PCON), types of PCON (patronage, clientelism, nepotism, cronyism and Bumiputra ownership), the age of the PCON and stock market reactions surrounding the 2018 Malaysian General Election (GE). Analyses were conducted by utilising data from firms listed on Bursa Malaysia. The Ordinary Least Squares (OLS) regression method was used to test the hypotheses. Based on the efficient capital market theory, Bursa Malaysia is deemed as a semi-strong efficiency market since the Malaysian stock market adjusted efficiently to the news of Barisan Nasional being defeated for the first time in the 2018 Malaysian GE. The political uncertainty theory indicated that firms were severely affected when exposed to high uncertainties of the government in power. Thus, significantly negative abnormal returns were experienced by PCON, while non-PCON showed significantly positive abnormal returns. The market also reacted significantly and negatively to types of PCON, such as patronage firms and clientelism firms. Furthermore, no significant differences were found between cronyism, nepotism, Bumiputra ownership, older PCON and stock market reactions. Further analysis using a non-parametric test showed that PCON types, such as patronage, clientelism and Bumiputra ownership firms contributed to a significantly negative stock market reaction. This indicates that these types of firms were statistically lower stock market reaction than non-PCON. Further analyses generated a unique list of PCON related to the main political figures namely, Mahathir, Daim and Anwar, by refining and extending previous studies based on Malaysia's changing political scene. The outcomes of these studies may assist regulators, investors and PCON in managing their relationships with and in the stock markets.
format	Thesis
qualification_name	other
qualification_level	Doctorate
author	Arina Rus Zahira, Rusli
author_facet	Arina Rus Zahira, Rusli
author_sort	Arina Rus Zahira, Rusli
title	Stock market reaction of political connections surrounding 2018 Malaysian general election
title_short	Stock market reaction of political connections surrounding 2018 Malaysian general election
title_full	Stock market reaction of political connections surrounding 2018 Malaysian general election
title_fullStr	Stock market reaction of political connections surrounding 2018 Malaysian general election
title_full_unstemmed	Stock market reaction of political connections surrounding 2018 Malaysian general election
title_sort	stock market reaction of political connections surrounding 2018 malaysian general election
granting_institution	Universiti Utara Malaysia
granting_department	College of Business (COB)
publishDate	2022
url	https://etd.uum.edu.my/10730/1/permission%20to%20deposit-embargo%2084%20months-s903089.pdf https://etd.uum.edu.my/10730/2/s903089_01.pdf https://etd.uum.edu.my/10730/3/s903089_02.pdf
_version_	1783729418487726080

Stock market reaction of political connections surrounding 2018 Malaysian general election

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