This study examines the impacts of ESG on the corporate performance government-linked companies (GLCs) in Malaysia. For the period 2006-2012, ESG disclosure data were extracted from the Sustainalytics ESG performance reports, while financial data were obtained from the Bloomberg database. Data development analysis (DEA) was used to estimate efficiency in the first stage; a regression analysis was performed to test the relationship between ESG and efficiency in the second stage. The empirical results of this study show that GLCs focused more on governance disclosures, followed by social and environmental aspects. Moreover, governance will improve firm efficiency, but social and environmental factors have no similar effect. In conclusion, this study provides insight on the limited literature on ESG and informs the relevant stakeholders on the important ESG components for financial and investment decisions.
This study aims to examine the effects of current overproduction on future operating efficiency and inventory write-downs. Using electronic manufacturing companies listed on NYSE/AMEX/NASDAQ during the period of 2003-2013, this study: (i) employs the interaction term between relative fixed cost levels and excess quantity of inventory produced to measure overproduction, (ii) utilizes the dynamic slacks based measure model to estimate operating efficiency, and (iii) examines inventory write-downs. Our findings show that overproducing firms experience improved but unsustainable subsequent operating efficiency, as overproduction is a result of optimistic sales forecasting, which leads to higher subsequent inventory write-downs. Overall, this paper suggests that production managers should be prudent in anticipating future sales demand, as short product life cycle might cause higher inventory obsolescence on excess production.
This paper explores whether the recognition of asset impairments provides an opportunity for earnings management by examining changes in the performance. First, we apply a dynamic data envelopment analysis model to evaluate the operating performance of Taiwanese electronics firms for the period from 2004 to 2013. Statistical tests are next applied to assess the average efficiency variation between the periods before and after firms recognise asset impairments. Several empirical findings are as follows: managers recognise asset impairments when their firms have poor performance as compared to other firms that do not record any asset impairments recognition, and that their performance keeps on improving in both the year of recognising asset impairments and the year after asset impairments recognition. That is, managers tend to recognise asset impairments to improve operating performance, while the firms are performing poorly, supporting the opportunistic behaviour theory.
Purpose -The purpose of this paper is to investigate the efficiency of Malaysian public-listed software companies in transforming intellectual capital (IC) into corporate values by using the data envelopment analysis (DEA) methodology. Design/methodology/approach -The authors use three individual components of value added intellectual coefficient (VAICt) as the input variables, and Tobin's Q and return on equity (ROE) as the output variables. Findings -Examining a sample of 25 companies, findings of this study show that companies listed on the main market of Bursa Malaysia are less efficient than those listed on the ACE market. Among the sample companies, Eduspec Holdings Berhad, which falls in the "stars" zone, is the most efficient company with the highest frequency of reference. The results remain robust despite the criticism about the validity of VAICt as an IC indicator. Practical implications -The benchmarking analysis of this study may shed light for the managers in software companies to benchmark and improve their efficiency in IC management. Originality/value -This is the first paper to examine the IC efficiency of Malaysian software companies through DEA.
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