The corporate risk-taking and performance of politically connected firms: evidence from Malaysia

IF 3.3 Q2 BUSINESS

Asia-Pacific Journal of Business Administration Pub Date : 2022-10-31 DOI:10.1108/apjba-07-2021-0315

Alice Chin, Ooi Chin Lye, K. Najaf

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引用次数: 1

Abstract

PurposeOne of the significant components of a firm's overall sustainability is establishing and nurturing governance. This study attempts to understand how politically connected firms maintain sustainability measures in terms of risk-taking strategies. This paper has two purposes. The first purpose is to provide empirical evidence on the politically connected (PC) firms' corporate risk-taking and performance. The second purpose is to investigate the moderating impact of PC firms' risk on corporate performance.Design/methodology/approachTo conduct the analysis to test our hypothesis efficiently, data has been collected from Bloomberg and annual reports of all Malaysian PC and non-PC companies. The final sample comprises 561 firms over the investigation period 2010–2019. The methodology entails Ordinary Least Squares (OLS) regressions of the impact of the PC firms on corporate risk-taking and performance. The authors also conduct t-tests of the equality of means of corporate risk-taking and performance between PC and non-PC companies.FindingsThe authors’ results show that politically connected firms undertake significant less corporate risk and relish higher financial performance than their counterparts. It implicatively insinuates that the presence of a politician on the board enables the management to mitigate the risk-taking, which makes the firms more profitable. The authors’ results corroborate network theory, suggesting that political ties alleviate the agency issue and safeguard the shareholders' interest.Research limitations/implicationsThe study's results were important as they highlighted the sustainable development of PC and non-PC companies, offering insights to researchers, policymakers, regulators, financial report users, investors, environmental unions, employees, clients and society.Originality/valueThis paper is novel since it is unique in evaluating sustainable practice in PC and non-PC firms.

查看原文本刊更多论文

有政治关系的公司的企业风险和业绩:来自马来西亚的证据

目的公司整体可持续性的重要组成部分之一是建立和培育治理。本研究试图了解政治关联企业如何在风险承担策略方面保持可持续性措施。本文有两个目的。第一个目的是为政治关联（PC）公司的企业风险承担和绩效提供实证证据。第二个目的是研究个人电脑公司风险对公司绩效的调节作用。设计/方法/方法为了有效地进行分析以检验我们的假设，我们从彭博社和所有马来西亚PC和非PC公司的年度报告中收集了数据。最终样本包括2010-2019年调查期间的561家公司。该方法包括PC公司对企业风险承担和绩效影响的普通最小二乘回归。作者还对个人电脑公司和非个人电脑公司的企业风险承担手段和绩效的平等性进行了t检验。研究结果作者的研究结果表明，与同行相比，有政治关系的公司承担的企业风险要小得多，财务业绩也要高得多。它含蓄地暗示，董事会中有一位政治家，可以让管理层减轻风险，从而使公司更有利可图。作者的研究结果证实了网络理论，表明政治联系缓解了代理问题，维护了股东利益。研究局限性/含义该研究的结果很重要，因为它们突出了个人电脑和非个人电脑公司的可持续发展，为研究人员、政策制定者、监管机构、财务报告用户、投资者、环境工会、员工、客户和社会提供了见解。原创性/价值这篇论文很新颖，因为它在评估个人电脑和非个人电脑公司的可持续实践方面是独一无二的。

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来源期刊

Asia-Pacific Journal of Business Administration BUSINESS-

CiteScore

7.20

自引率

13.20%

发文量

期刊介绍： The Asia Pacific Journal of Business Administration (APJBA) publishes original research on: Business Strategy and Policy, Accounting and Board Governance, Marketing and People Management, and Operations and Supply Chain Management. The journal welcomes practical and skill-based submissions in these areas. There is particular interest in submissions regarding: Sustainable Business Practices, Quality Management Practices, Innovation and Creativity in Management, as well as Managing a Learning Organisation. The Asia Pacific region is full of collaborations between government, NGOs and private enterprise. Submissions are welcome which contribute to our understanding of partnerships and the cross-cultural issues. Research methods vary, and the journal is interested in the full diverse of qualitative (case and action research, etc) as well as quantitative survey studies and their recommendations. The APJBA seeks to become a forum for both established scholars and early career researchers in all aspects of management and business in the Asia-Pacific region. Emphasis is on rigour and relevance, on theory and practice, in a globalised scholarly environment.