Corporate Performance and Governance in Malaysia

25 Pages Posted: 31 Jan 2006

See all articles by Yougesh Khatri

Yougesh Khatri

International Monetary Fund (IMF)

Luc Leruth

International Monetary Fund (IMF)

Jenifer Piesse

University of Stellbosch; King's College London - Department of Management

Date Written: September 2002

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.

Keywords: corporate governance, stochastic frontier, Southeast Asian crisis

JEL Classification: O47, P210

Suggested Citation

Khatri, Yougesh and Leruth, Luc and Piesse, Jenifer, Corporate Performance and Governance in Malaysia (September 2002). IMF Working Paper No. 02/152, Available at SSRN: https://ssrn.com/abstract=879969

Yougesh Khatri (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Luc Leruth

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Jenifer Piesse

University of Stellbosch

Stellenbosch, Western Cape
South Africa

King's College London - Department of Management ( email )

Virginia Woolf Building
22 Kingsway
London, England WC2B 6NR
United Kingdom

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