Corporate governance strength and stock market liquidity in Malaysia

Al-Jaifi, Hamdan Amer; Al-Rassas, Ahmed Hussein; Al-Qadasi, Adel Ali

doi:10.1108/ijmf-10-2016-0195

Cited by 39 publications

(39 citation statements)

References 75 publications

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“…To control the potential reverse causality problem, Models 1 and 2 were re-estimated by using the lagged values of the independent variables (Al-Jaifi, 2017; Al-Jaifi, Al-Rassas, & AL-Qadasi, 2017;Al-Qadasi & Abidin, 2018;Alves, Couto, & Francisco, 2015;Miletkov, Poulsen, & Wintoki, 2014;Srinidhi, Gul, & Tsui, 2011). Table 6 shows that BCNDUAL, BCNMEM have a positive relationship with AEM and REM which is consistent with Table 5.…”

Section: Endogeneity Issue Of the Main Modelssupporting

confidence: 59%

Board Chairmen’s Involvement in the Nomination and Remuneration Committees and Earnings Management

Al-Absy¹,

Ismail²,

Chandren³

2018

AABFJ

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A board chairman is a very influential figure in a firm which may be dominated by an insider director, who, in some cases, is a family member. Consequently, the board chairmen (BC) may play a vital role in the firm's output, especially when they sit on the board committees. Therefore, the current study aims to examine the influence of the BC who are also: the chairmen of the nomination committee (BCNDUAL); ordinary members of the nomination committee (BCNMEM); the chairmen of the remuneration committee (BCRDUAL); and ordinary members of the remuneration committee (BCRMEM), on the level of accrual earnings management (AEM) and real earnings management (REM). This study also tests the overall influence of the BC's involvement in the nomination committee (BCNINV) by combining the terms of BCNDUAL and BCNMEM into BCNINV and the overall influence of BC's involvement in the remuneration committee (BCRINV) by combining the terms of BCRDUAL and BCRMEM into BCRINV, on the level of AEM and REM. This study selected 300 firms listed on the Bursa Malaysia Main Market with the lowest positive performance (based on return on assets (ROA)) for the years 2013 to 2015. The random-effects feasible generalized least squares (FGLS) regression shows that BCNDUAL, BCNMEM and BCNINV have a significant positive relationship with AEM and REM. However, BCRDUAL and BCRINV have a significant negative relationship with AEM but not with REM. This study aims to alert policy makers, firms and their stakeholders, as well as researchers of the need to strengthen their board committees' effectiveness (especially the nomination committee), and to make them more independent.

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Section: Endogeneity Issue Of the Main Modelssupporting

confidence: 59%

Board Chairmen’s Involvement in the Nomination and Remuneration Committees and Earnings Management

Al-Absy¹,

Ismail²,

Chandren³

2018

AABFJ

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“…Furthermore, the work of the IA can also lead to a change in the costs of the external audit (Felix et al 2001). Abbott et al (2012) in particular substantiate this in the course of their study. They identify that the performance of IA increases the efficiency of the overall audit volume, which benefits both, the company and the external audit firms.…”

Section: Internal Auditing and Support Of The External Auditormentioning

confidence: 60%

“…But there is no consistent position in the literature on what this change looks like or whether it is exclusively positive or negative from an organizational perspective. On the one hand, it is argued that the effectiveness of IA leads to a reduction in the costs of the external audit, especially if IA covers areas of work relevant to the audit from an external perspective, such as accounting or fraud prevention and identification (Abbott et al 2012;Ho and Hutchinson 2010). On the other hand, there have been studies which have concluded that this relationship is not correct, as organizations may view the work of internal auditors and external auditors as complementary rather than substitutes (Singh and Newby 2010).…”

Section: Internal Auditing and Support Of The External Auditormentioning

confidence: 99%

What is the value of internal auditing? – A literature review on qualitative and quantitative perspectives

Eulerich¹,

Eulerich²

2020

MAB

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In recent years, research on internal audit has developed significantly. Numerous papers have discussed the importance of internal auditing (IA) as a central pillar of the corporate governance system. Through its activities, IA supports the Audit Committee and the CEO/C-Level. As an independent, objective assurance and advisory function, it is designed to add value through the audit of the internal control system, risk management and the governance processes. Interestingly, research on internal audit unfortunately rarely corresponds to these added value concept defined in the core responsibilities. Therefore, this literature review attempts to highlight the possible perspectives of the added value discussion and to help define future research avenues.

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“…The KSE was founded in 1947 and KSE 100 index was initiated in 1991 in which top 100 best performing companies were selected on the grounds of their capital. Like any other market, in KSE liquidity is considered as an important feature as it affects stock returns (Amer Al-Jaifi, Hussein Al-rassas, & Ali AL-Qadasi, 2017). Level of liquidity in any financial market is an important issue as high liquidity in stock market could result in the economic growth of the country.…”

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confidence: 99%

Stock Liquidity and Real Economic Activities-Evidence from Karachi Stock Exchange

2019

EJBM

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Stock markets play a significant role for investors and financial institutions and help them to in order to mobilize their finances and provide platform to buy and sell their stock. In any country stock market has a significant effect on the economy as it regulates money and debts. This helps in focusing on the allocation of our investment and resources efficiently. This further enhances the structure of stock market and guide future direction for investment opportunities. Equity market is considered as a source of capital for the investors and financial organizations. The aim of our is to investigate the Karachi stock market liquidity using firm level data describing the real economic activity of the country by controlling equity and non equity factors. For this purpose, alternative liquidity proxies are applied to economic indicators by taking the stock sample from KSE during the tenure of last years (1988-2018). The tools for measuring illiquidity measures Amihud (ILR) and the relative spread (RS) were used whereas Turnover (TUR) and the volume of trading (VTR) are used to measure liquidity. The sample for this study consists of firms' stocks listed on the Karachi Stock Exchange for calculating the liquidity proxies and real economic activity, daily stocks prices data and returns, total number of shares and trading volume of each company. For measuring real economic activity the macro variables used are: Real GDP (RGDP), Real consumption (RC), Real investment (RI) and the unemployment rate (UnR). Hypotheses were developed according to the objective of the study. Standard linear and nonlinear models for the GDP calculation and regression model for developing the correlation between stock market liquidity and various economic factors. Jarque-Bera test, causality tests were applied to find correlation between stock market liquidity and real economic activity factors. The result of this study suggested that stock market liquidity has a significant effect on real economic activity in Karachi stock exchange market.

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Corporate governance strength and stock market liquidity in Malaysia

Cited by 39 publications

References 75 publications

Board Chairmen’s Involvement in the Nomination and Remuneration Committees and Earnings Management

Board Chairmen’s Involvement in the Nomination and Remuneration Committees and Earnings Management

What is the value of internal auditing? – A literature review on qualitative and quantitative perspectives

Stock Liquidity and Real Economic Activities-Evidence from Karachi Stock Exchange

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