The factors that cause companies to be suspended from the Kuala Lumpur stock exchange / Mohd Hassan Che Haat … [et al.]

Che Haat, Mohd Hassan and Abd Rahman, Rashidah and Abd Hamid, Nadiah and Mahenthiran, Sakthi (2006) The factors that cause companies to be suspended from the Kuala Lumpur stock exchange / Mohd Hassan Che Haat … [et al.]. Malaysian Accounting Review, 5 (1). pp. 115-138. ISSN 1675-4077

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Abstract

This is an empirical study of troubled (i.e., PN 4) companies, and their agency costs to outsiders who invest in them. The sample consisted of 21 companies each in three groups made up ofPN4, positive economic profit and negative economic profit companies. The study finds that outside investors in PN 4 companies incurred extreme agency costs compared to positive economic profit companies because of poor governance. Relative to the control group, PN 4 companies had higher insider ownership, borrowing, and lower equity values. The study highlights the uniqueness of the Malaysian securities law that allows corporate insiders to proactively use monitoring mechanisms to lower agency costs.

Item Type: Article
Uncontrolled Keywords: Troubled companies; corporate governance; Disclosures; Insider ownership
Subjects: H Social Sciences > HD Industries. Land use. Labor > Industry > Corporate organization. Corporate governance
H Social Sciences > HG Finance > Investment, capital formation, speculation > Stock exchanges. Insider trading in securities > Malaysia
Divisions: Accounting Research Institute (ARI)
Depositing User: Staf Pendigitan 1
Date Deposited: 05 Apr 2016 05:02
Last Modified: 21 Jul 2016 09:20
URI: http://ir.uitm.edu.my/id/eprint/13793

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