Socioemotional Wealth and Firms’ Control: Evidence from Malaysian Chinese Owned Companies

Abstract

This paper explores how the preservation of socioemotional wealth can be manifested in the control and corporate governance of Malaysian Chinese firms. Using panel data from the Industrial Products index of the Bursa Malaysia (the Malaysian stock exchange) during 2003-2006, we show that the ingrained 'life-raft values' among overseas Chinese entrepreneurs can be associated with the preservation of their socioemotional wealth, and thus they prioritize control over their firms. Additionally, we confirm the monitoring role of non-dominant large shareholders in reducing the families' influence in managing and enhancing their firms' performance. Specifically, control contestability exercised by the non-dominant large shareholders mediates the relationship between a family's involvement in management and their firm's performance. Abstrak:Makalah ini membahas bagaimana pelestarian kekayaan sosioemosional dapat diwujudkan dalam kontrol dan tata kelola perusahaan dari perusahaan China Malaysia. Menggunakan data panel dari indeks Industri Produk dari Bursa Malaysia selama [2003][2004][2005][2006], menunjukkan bahwa mendarah-daging 'hidupnilai rakit' antara pengusaha Cina di luar negeri dapat dikaitkan dengan pelestarian kekayaan sosioemosional mereka, sehingga mereka memprioritaskan kontrol atas perusahaan mereka. Selain itu, kami mengkonfirmasi peran monitoring pemegang saham besar non-dominan dalam mengurangi kinerja keluarga 'pengaruh dalam mengelola dan meningkatkan perusahaan mereka.' Secara khusus, kontrol contestability dilakukan oleh pemegang saham besar non-dominan yang memediasi hubungan antara keterlibatan keluarga dalam manajemen dan kinerja perusahaan mereka.

A systematic literature review on family business: insights from an Asian context

“…The main characteristic of a family firm is the presence and performance of its founder. Some authors maintain that institutions with family firm characteristics, such as the concentration of ownership and management in a single family, also impact on their respective levels of performance (Chien, 2014; Goh et al , 2015; Kota and Singh, 2016). Family companies are those founded and handed down from generation to generation within the scope of the same family, whether or not managed by members of the family with or without assistance from professional managers (Goh et al , 2015; Kota and Singh, 2016; Mokhber et al , 2017).…”

“…Some authors maintain that institutions with family firm characteristics, such as the concentration of ownership and management in a single family, also impact on their respective levels of performance (Chien, 2014; Goh et al , 2015; Kota and Singh, 2016). Family companies are those founded and handed down from generation to generation within the scope of the same family, whether or not managed by members of the family with or without assistance from professional managers (Goh et al , 2015; Kota and Singh, 2016; Mokhber et al , 2017). Within this same line of thinking, even those that do not participate in companies of this nature may imagine how involving persons from the same family may hinder every type of decision and negotiation.…”

Corporate tax policy, Shariah compliance and financial decisions: evidence from Malaysia

“…2.2.4 Non-debt tax shields. Non-debt tax shields have been used indirectly to shrink firms' long-term debt ratios and lowering the costs of issuing debt (Nhung et al, 2017;Goh et al, 2018) while Kanatani and Yaghoubi (2017) found that non-debt tax shields positively impact leverage ratios. Dan et al (2015), however, found this connection to be insignificant for private firms.…”

Profitabilitas, Pertumbuhan pada Struktur Modal, dan Ukuran Perusahaan sebagai Variabel Pemoderasi

“…Penelitian terdahulu yang dilakukan oleh Dewi & Sudiartha (2017), Puspita & Dewi (2019), Apsari & Dana (2018), Mujiatun et al (2021), dan menunjukkan bahwa profitabilitas berpengaruh positif pada struktur modal. Hasil yang berbeda ditemukan pada penelitian yang dilakukan oleh Mota & Moreira (2017), Ngjeliu (2018), Kythreotis et al (2017), Goh et al (2018), dan Khafid et al (2020) yang menunjukkan hasil bahwa profitabilitas berpengaruh negatif pada struktur modal.…”