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Ethnicity, politics and firm performance: evidence from Malaysia

Gul, Ferdinand A, Munir, Sa'adiah and Zhang, Liang 2016, Ethnicity, politics and firm performance: evidence from Malaysia, Pacific-Basin finance journal, vol. 40, no. Part A, pp. 115-129, doi: 10.1016/j.pacfin.2016.10.005.

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Title Ethnicity, politics and firm performance: evidence from Malaysia
Author(s) Gul, Ferdinand A
Munir, Sa'adiah
Zhang, Liang
Journal name Pacific-Basin finance journal
Volume number 40
Issue number Part A
Start page 115
End page 129
Total pages 15
Publisher Elsevier
Place of publication Amsterdam, The Netherlands
Publication date 2016-12
ISSN 0927-538X
Keyword(s) Corporate governance
Ethnicity
Politically connected firms
Firm performance
Malaysia
Social Sciences
Business, Finance
Business & Economics
Corporate boards
Relational demography
Connected firms
Diversity
Directors
Organisations
Perspective
Governance
Cronyism
Auditors
Summary Motivated by the inconclusive evidence on the role of ethnic diversity of directors and the limited research, this study examines whether there is an association between board ethnic diversity in Malaysian firms and firm performance. We find that the association between ethnic diversity of boards and firm performance is non-linear; at low levels of ethnic diversity there is a positive association but at higher levels of ethnic diversity, the association is negative. However, when we split the sample into politically and non-politically connected firms, we find that this association only holds for non-politically firms. Further, when we split our politically connected sample into Malay and non-Malay dominant boards, we find generally, that in both groups of firms, board ethnic diversity does not influence firm performance. Overall, these results suggest that the presence of political connection could undermine the role of ethnic diversity in influencing firm performance.
Language eng
DOI 10.1016/j.pacfin.2016.10.005
Field of Research 150103 Financial Accounting
1502 Banking, Finance And Investment
1501 Accounting, Auditing And Accountability
Socio Economic Objective 970115 Expanding Knowledge in Commerce
HERDC Research category C1 Refereed article in a scholarly journal
ERA Research output type C Journal article
Copyright notice ©2016, Elsevier B.V.
Persistent URL http://hdl.handle.net/10536/DRO/DU:30089442

Document type: Journal Article
Collections: Faculty of Business and Law
Department of Accounting
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