Foreign ownership and firm performance: evidence from Malaysia

It is a known fact that foreign multinational firms hold significant ownership in firms listed on Bursa Malaysia. These foreign owners do not only provide capital, but also managerial expertise and exceptional monitoring mechanism on managers. Therefore, it can be expected that foreign ownership imp...

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Main Author:	Mohd Abdullah Jusoh
Format:	Article
Language:	English
Published:	Fakulti Ekonomi dan Pengurusan 2015
Online Access:	http://journalarticle.ukm.my/9585/ http://journalarticle.ukm.my/9585/ http://journalarticle.ukm.my/9585/1/7326-33169-1-PB.pdf

id	ukm-9585
recordtype	eprints
spelling	ukm-95852016-12-14T06:50:22Z http://journalarticle.ukm.my/9585/ Foreign ownership and firm performance: evidence from Malaysia Mohd Abdullah Jusoh, It is a known fact that foreign multinational firms hold significant ownership in firms listed on Bursa Malaysia. These foreign owners do not only provide capital, but also managerial expertise and exceptional monitoring mechanism on managers. Therefore, it can be expected that foreign ownership improves firm performance and efficiency. However, the extent to which their participation in ownership could improve firm performance particularly in emerging countries such as Malaysia has to be empirically tested. This study investigates the relationship between foreign ownership and firm performance of public listed firms in Malaysia. Three years panel data of 730 Malaysian public listed firms were examined. The results show that foreign ownership has positive and significant relationship with ROA and Tobin’s Q. Therefore, the involvement of foreign investors in monitoring and controlling activities reduces agency conflict in the emerging economy. This is the first study that utilizes the extended agency theory to explain foreign ownership and performance in a developing country. Fakulti Ekonomi dan Pengurusan 2015 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/9585/1/7326-33169-1-PB.pdf Mohd Abdullah Jusoh, (2015) Foreign ownership and firm performance: evidence from Malaysia. Asian Journal of Accounting and Governance, 6 . pp. 49-54. ISSN 2180-3838 http://ejournal.ukm.my/ajac/issue/view/748/showToc
repository_type	Digital Repository
institution_category	Local University
institution	Universiti Kebangasaan Malaysia
building	UKM Institutional Repository
collection	Online Access
language	English
description	It is a known fact that foreign multinational firms hold significant ownership in firms listed on Bursa Malaysia. These foreign owners do not only provide capital, but also managerial expertise and exceptional monitoring mechanism on managers. Therefore, it can be expected that foreign ownership improves firm performance and efficiency. However, the extent to which their participation in ownership could improve firm performance particularly in emerging countries such as Malaysia has to be empirically tested. This study investigates the relationship between foreign ownership and firm performance of public listed firms in Malaysia. Three years panel data of 730 Malaysian public listed firms were examined. The results show that foreign ownership has positive and significant relationship with ROA and Tobin’s Q. Therefore, the involvement of foreign investors in monitoring and controlling activities reduces agency conflict in the emerging economy. This is the first study that utilizes the extended agency theory to explain foreign ownership and performance in a developing country.
format	Article
author	Mohd Abdullah Jusoh,
spellingShingle	Mohd Abdullah Jusoh, Foreign ownership and firm performance: evidence from Malaysia
author_facet	Mohd Abdullah Jusoh,
author_sort	Mohd Abdullah Jusoh,
title	Foreign ownership and firm performance: evidence from Malaysia
title_short	Foreign ownership and firm performance: evidence from Malaysia
title_full	Foreign ownership and firm performance: evidence from Malaysia
title_fullStr	Foreign ownership and firm performance: evidence from Malaysia
title_full_unstemmed	Foreign ownership and firm performance: evidence from Malaysia
title_sort	foreign ownership and firm performance: evidence from malaysia
publisher	Fakulti Ekonomi dan Pengurusan
publishDate	2015
url	http://journalarticle.ukm.my/9585/ http://journalarticle.ukm.my/9585/ http://journalarticle.ukm.my/9585/1/7326-33169-1-PB.pdf
first_indexed	2023-09-18T19:55:18Z
last_indexed	2023-09-18T19:55:18Z
_version_	1777406488845746176

Foreign ownership and firm performance: evidence from Malaysia

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