External monitoring, managerial ownership and form performance in Malaysian capital market: a GMM based panel data approach

Ali Ahmed, Huson Joher and Wadud, Ikm Mokhtarul 2009, External monitoring, managerial ownership and form performance in Malaysian capital market: a GMM based panel data approach, Corporate ownership & control, vol. 7, no. 1, Fall, pp. 131-137.

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Title External monitoring, managerial ownership and form performance in Malaysian capital market: a GMM based panel data approach
Author(s) Ali Ahmed, Huson Joher
Wadud, Ikm Mokhtarul
Journal name Corporate ownership & control
Volume number 7
Issue number 1
Season Fall
Start page 131
End page 137
Total pages 7
Publisher Virtus Interpress
Place of publication Sumy, Ukraine
Publication date 2009
ISSN 1727-9232
1810-3057
Keyword(s) Corporate governance
performance
non-executive independent directors
Summary This study re-examines whether the structure of share ownership by both directors and institutional ownership provides explanation for firm performances. These relationships are modelled and estimated using GMM based dynamic panel data over a period from 1997 to 2001 with a sample of 100 CI components companies listed on Main Board of Malaysia. The findings provide strong evidence of simultaneity between firm performance and managerial ownership. Although an insignificant relationship between firm performance and institutional ownership is~ observed, the institutional holdings provide strong substitute for managerial ownership with a strong negative relationship between managerial ownership and institutional ownership. This is in line with the managerial incentive hypothesis, which suggests that manager's share in the firm's ownership leads to better performance and the monitoring substitute hypothesis, which suggests that managerial ownership could be effectively replaced by institutional ownership.
Language eng
Field of Research 140209 Industry Economics and Industrial Organisation
Socio Economic Objective 910401 Industrial Relations
HERDC Research category C1 Refereed article in a scholarly journal
HERDC collection year 2009
Persistent URL http://hdl.handle.net/10536/DRO/DU:30016828

Document type: Journal Article
Collections: Faculty of Business and Law
School of Accounting, Economics and Finance
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