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Corporate governance and firm performance of shariah versus conventional public listed firms in Malaysia

Nur Amalina Izzati, Saidin (2020) Corporate governance and firm performance of shariah versus conventional public listed firms in Malaysia. Masters thesis, Universiti Utara Malaysia.

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Abstract

This research study aims to identify the difference in the proportion of woman directors on board between Shariah compliant firms and conventional firms and to examine the association between corporate governance mechanisms and firm performance in Shariah compliant versus conventional public listed firms in Malaysia from the year ended 2015 to 2019. Corporate governance mechanisms chosen in this research are the board size, board independence, women on board, Chief Executive Officer (CEO) duality, audit size and frequency of audit meeting while the firm performance is measured by return on asset (ROA) and return on equity (ROE). This research used panel data retrieved from the annual report of the selected firms and from the data stream access provided at Sultanah Bahiyah Library, Universiti Utara Malaysia. The data were analyzed using descriptive statistic, Pearson correlation and multiple linear regression. Descriptive statistics shows the difference in proportion of woman directors on board between Shariah compliant and conventional firms while multiple linear regression describes the association between corporate governance mechanisms and firm performance. Shariah compliant firms in this study appears to have higher proportion of woman directors on board compared to the conventional firms. Board size and frequency of audit meeting has a significant and negative association with ROA and ROE, significant and positive association between the mechanisms of women on board and CEO duality with ROE and insignificant between board independence and audit committee size with ROA and ROE, women on board and CEO duality measured by ROA in the Shariah compliant firms. On the other hand, board size and audit committee size in the conventional firms have a significant and positive association with ROA and ROE and also between women on board and ROE, significant and negative association between board independence with ROA and ROE as well as between frequency of audit meeting and ROA for the firms. Insignificant association also is found between women on board and ROA, frequency of audit meeting with ROE and between CEO duality with ROA and ROE. This implies that a mechanism of corporate governance can affect the performance of a firm where it is important to have a good corporate governance to increase firm’s performance.

Item Type: Thesis (Masters)
Supervisor : Sofi, Mohd Fikri
Item ID: 9894
Uncontrolled Keywords: Corporate governance, corporate governance mechanisms, firm performance, Shariah compliant firms, Malaysia
Subjects: H Social Sciences > HD Industries. Land use. Labor. > HD2709-2930.7 Corporations
Divisions: Islamic Business School
Date Deposited: 28 Sep 2022 08:05
Last Modified: 28 Sep 2022 08:05
Department: Islamic Business School
Name: Sofi, Mohd Fikri
URI: https://etd.uum.edu.my/id/eprint/9894

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