Business Administration and Business Economics

Parisa Mohammadi · Suzilawati Kamarudin · Rosmini Omar ·International Journal of Economics and Management ·2020 ·JEL: M130, M210

Social entrepreneurship is considered a powerful means that provides sustainable solutions to existing problems, especially in developing societies. Since intention significantly affects the individuals’ involvement in social entrepreneurship, it is extremely important to support the intention of the young generation to move toward social entrepreneurial activities. To achieve this goal, the determinants of social entrepreneurial intention (SEI) need to be recognized and well understood. Literature suggests that Islamic values influence decision-making processes and individuals' intention to become a social entrepreneur. However, little research has been undertaken to understand social entrepreneurship from an Islamic perspective and the mechanism through which values impact social entrepreneurial intention. Using the theory of planned behavior, this study aims to examine the interrelationship between Islamic values, empathy, and SEI. The researchers employed structural equation modeling-partial least square technique to analyze the data. Based on a sample of 202 Muslim students selected from public and private universities in Malaysia, we found that empathy mediates the relationship between Islamic values and SEI. More specifically, Islamic religious values only affect SEI indirectly through empathy. Additionally, empathy positively affects individuals’ intention to establish a social venture. Bringing religion into play sheds light on the antecedents of SEI

Fairus Halizam A Hamzah · Nadiah Abd Hamid · Siti Noor Hayati Mohamed Zawawi · Rohayu Yusup · Norazah Md Azali ·Malaysian Journal of Economic Studies ·2020 ·JEL: G3, M42, E62, H32, E62

The Inland Revenue Board of Malaysia (IRBM) provides a monitoring mechanism of corporate governance through tax audits. However, indicators associated with the tax authority monitoring system remain underexplored due to data confidentiality. This study aims to examine the indicators used by the tax authority in performing tax monitoring where the tax return data of firms that claim reinvestment allowance (RA) were employed alongside the historical audit data of corporate taxpayers of both a tax-monitored firm and an unmonitored tax firm. The results of the analysis reported that the tax authority monitoring system is closely associated with fundamental details disclosed in the tax return namely, assessment year, profitability, scale of operation, firm directorship, tax consultancy and industry type. In contrast, the incidents of tax avoidance and incentive utilisation indicators were not prominent in tax authority monitoring. The investigation of firms that experienced tax monitoring provides insight into indicators which interest tax authorities when it comes to a firm’s tax audit. This research revealed new evidence on IBRM preferred indicators in conducting tax monitoring.

Lim Boon-Leong (Tunku Abdul Rahman · University College) · Foong Swee-Sim ·International Journal of Economics and Management ·2020 ·JEL: G32, G34

We examine whether managerial ability is an essential factor that determine CEO remuneration, and as means in resolving both Type I and Type II agency conflicts. Our sample is based on Malaysian family listed companies over 2009-2015, and our results show that, apart from being a crucial determinant of professional CEO remuneration, managerial ability also plays an important role in enhancing the pay-performance sensitivity of outsider manager of Malaysian family firms. Our results also show that the positive association between managerial ability and remuneration of family CEO only helps to mitigate the risk of Type II agency conflict. This agency risk is further heightened by the existence of a significant negative effect of managerial ability on CEO payperformance sensitivity in firms which appoint family CEO as board chairman; and firms with CEO who serves on the remuneration committee. These results are robust to alternative measures of firm performance as well as tests of endogeneity

Swee-Sim Foong · Jiunn-Shyan Khong · Boon-Leong Lim ·Malaysian Journal of Economic Studies ·2021 ·JEL: G32, G34

This paper examines the risk taking behaviour of Chinese CEO. Our analysis is based on a sample of 362 family firms in Malaysia over the 2009-2015 period using panel GMM methodology. Firstly, our results offer evidence that Chinese CEOs are risk taking. We then examine how CEO power, in the context of Finkelstein’s (1992) structural power, ownership power, expert power and prestige power, might drive risk taking of Chinese CEOs. The results are rather mixed where greater ownership power is likely to promote higher risk taking but greater expert power resulted in lower risk taking. We further show that corporate governance can mitigate risk taking of Chinese CEO in family firms. When the proportions of independent directors and foreign institutional shareholdings exceed the median thresholds of 40% and 5%, respectively, we find that CEO risk taking behaviour turns from positive to negative. Stronger evidence is found when we adjust the thresholds to the 75th percentile of 50% and 15%, respectively. The result is also robust with the use of leverage as a measure for CEO risk taking.

Hong Kay Tze · Ng Siew Imm · Ho Jo Ann · Tan Houng Chien · Lim Chui Seong ·International Journal of Economics and Management ·2021 ·JEL: M14, M30, M31

It is commonly accepted that positive corporate social responsibility (CSR) image brings desirable outcomes, for instance, brand loyalty, improved brand image, enhanced store image, as well as increased visit intention; suggesting there are various direct outcomes of CSR image. Underpinned by the Persuasion Knowledge Model (PKM), this paper proposes that these outcomes are presented in a sequential manner, where there is a core mechanism that relates CSR image to store image and brand awareness, and in turn associate with consumers’ visit intention. A quantitative research methodology has been used where a structured questionnaire was distributed to consumers in selected states in Malaysia using the mall intercept method. Structural equation modelling was applied to examine the proposed model. The discoveries of the current study offer the observed evidence for the correlation between perceived CSR image and hypermarket visit intention, mediated by overall store image and brand awareness. The study emphasises a prominent role of CSR schemes, bringing together the overall hypermarket store image and the hypermarket brand awareness, which will enable hypermarket management to further boost visit intention from consumers

Siew-Boey Yeoh · Chee-Wooi Hooy ·Malaysian Journal of Economic Studies ·2021 ·JEL: G31, G32

Our paper uses a multidimensional analysis to provide a better insight on the relationship between CEO foreign experience and corporate risk-taking. By decomposing the foreign experience of CEOs from developing economies such as Malaysia, we find that CEOs who have studied in OECD countries undertake higher levels of risk-taking and CEOs’ foreign working experience may have an adverse effect on risk-taking behaviour especially if the working experience is obtained from non-OECD countries. Additional analysis reveals that younger CEOs and family CEOs with foreign working experience matter in reinforcing the firms’ risk-taking activities. Overall, our findings provide implication for researchers and policymakers seeking to nurture risk-taking behaviours and innovativeness in emerging countries.

Abd Halim Ahmad · Nur Adiana Hiau Abdullah · Kamarun Nisham Taufil Mohd ·International Journal of Economics and Management ·2022 ·JEL: G33, G32, G34

This study examined the effects of institutional factors, including; board size, blockholder ownership, and political connections, as some of the determinants (apart from various company-level financial variables) on the outcomes of financially distressed listed companies in Malaysia. A highly concentrated ownership structure is common in most developing countries, including Malaysia. Besides, Malaysia has a unique disclosure environment where all listed companies must release relevant and adequate information to the public to improve investors' protection and corporate transparency. Therefore, Practice Notes which are standards and measures for Malaysian Listed Companies, are designed to help listed companies that are financially distressed to restructure their debts within a stipulated time, giving them sufficient time to re-emerge in the exchange. The logistic regression analysis results on a sample of financially distressed Malaysian public listed companies suggested that; interest coverage ratio, stock returns, blockholder ownership, and political connections were significance at the 5% level. The institutional variables suggested that blockholder ownership and political connectedness had a positive and significant effect on the possibility of companies emerging from financially distressed conditions. The findings have provided important practical implications for managers and potential investors in their risk management decisions.

Hasnan Baber ·Malaysian Journal of Consumer and Family Economics ·2019

The study is aimed to investigate the gap between the level of service quality expectations and perception and its impact on customer satisfaction in Islamic banks of Malaysia. Shariah Compliance dimension was included in the SERVQUAL model of service quality. A 29 item questionnaire was employed to collect data from 721 customers of selected banks of Malaysia. In this study, data were statistically analysed through reliability analysis, paired sample t-test, exploratory factor analysis, regression analysis and followed by confirmed factor analysis. Structural equation modelling was used to measure service quality perception and customer satisfaction. This study revealed that there is a partial significant gap between expected and perceived service quality level except in Shariah Compliance and tangibility. The study suggested that there is a positive and significant impact of modified multidimensional SERVQUAL quality scale on customer satisfaction. Addition of Shariah compliance dimension showed the highest contributing factor among all dimensions and thus its inclusion was justified. The study was original and novel to find a quality gap and its impact on Malaysian Islamic bank customers and it will help policymakers of Malaysia and other countries to improve to meet customer expectations.

Wan Norhidayah W Mohamad · Faten Nabila Abdul Fatah · Zaiton Samdin · Bakti Hasan-Basri ·International Journal of Economics and Management ·2022 ·JEL: Q51, Q57

The tourism sector plays an important part in Malaysia's economy. It includes beach and recreational tourism. However, most recreational beaches in Malaysia do not impose an entrance fee on visitors. Depending on government funding to maintain recreational beach facilities is not the best option for the future. Therefore, funding directly from visitors is needed to help cater for beach maintenance costs. Based on this, it is crucial to understand how much visitors are willing to pay for the recreational use of beaches, as any money collected could be used to help to improve facilities and services at beach areas. This study investigated visitors' willingness to pay for recreational beach facilities and has provided policy recommendations for better management of tourist facilities and services in the future. Teluk Kemang beach in Port Dickson was chosen as the case study location. This study applied the Choice Experiments (CE) method, and the model used was the Conditional Logit (CL) model. This research used four attributes: amenities, recreational facilities, cleanliness, and entrance fee. The CL results revealed that visitors were willing to pay for good amenities and cleanliness, with values of RM2.07 and RM2.43, respectively. Therefore, it was discovered that it was practical to charge an entrance fee to cover improved maintenance of beach facilities

Kean-Siang Ch'ng · Suresh Narayanan ·Malaysian Journal of Economic Studies ·2019

It is widely held that risk preferences differ between the three ethnic groups in Malaysia with the Chinese having the highest preference for risk and Malays having the lowest. This has been used to explain the Chinese preference for, and success in, business ventures relative to Malays. However, this assumption has never been tested in a controlled environment. Three hundred working adults from the three groups were recruited and participated in two-choice lottery games with real monetary reward and risk. The results were analysed using the framework of cumulative prospect theory. The outcomes indicate that broad generalisations regarding inter-ethnic risk tolerance are inaccurate. Malays were less risk averse than the Chinese or others when facing choices with the possibility of losing but became more risk averse only when facing choices with the possibility of winning. Malays were also more willing to take greater risk to reduce possible loss than to settle for a sure gain, compared to the others.

AHMAD FAHMI SHEIKH HASSAN · ADI FAZULI MAMAT · YUSUF KARBHARI · MUSLIM HAR SANI MOHAMAD ·International Journal of Economics and Management ·2018 ·JEL: M42; M41;G34

This study examines the effectiveness of an Audit Committee (AC) operating in a large government statutory body in an emerging economy, namely the Inland Revenue Board of Malaysia (IRBM). This study is timely, as previous studies focussing on AC effectiveness in relation to the public sector are sparse. Data collection was through in-depth interviews with key individuals involved in the IRBM governance process, including AC members, senior management and external auditors. The study finds existence of a weak AC governance function that inadequately oversees financial reporting and internal control systems. We find the independence of AC members questionable, as a communication gap exists between AC members and the external auditor. In particular, the study highlights that top management should ensure that its AC fulfils its assigned role and that urgent attention is given to issues on composition, appointment and diligence of its AC members. We conclude that the IRBM should consider improving independence by appointing an external independent AC member(s) from either the big four or an influential industry expert to provide the necessary input and expertise to ensure that public confidence continues.

Ummu Kolsome Farouk · Mok Siew Wing ·Malaysian Journal of Consumer and Family Economics ·2019

The purpose of this research is to understand why a co-founder chose to establish a non-governmental organization (NGO) type social enterprise, the challenges he faced in managing its social and financial sustainability, and the initiatives he took to negotiate those challenges. A narrative approach was used in this qualitative single case study to analyse the self-accounts of the co-founder, and the various internal and external information. The primary drivers of the co-founder's establishment of an NGO type social enterprise were his recognition of an opportunity to redress the prevalence of social ills adversely affecting children, his extensive experience on social issues impacting children, and the successful establishment of his first NGO. Primary challenges faced by the co-founder were notably in terms of maintaining the social relevance of his NGO and securing both its financial sustainability and future scalability. The research is limited by the fact that it is a narrative study, based upon the lived experience, of the co-founder of an NGO type social enterprise. Hence, although the generalizability of the findings is compromised, it can still be placed in the context of past research, in the area of social entrepreneurship in general, underpinned by Malaysia’s social entrepreneurship landscape. This paper provides evidence on how the co-founder of an NGO type social enterprise assessed its developmental stage, measured its success, and paved its path toward becoming a centre of excellence.

SOH WEI NI · ANNUAR MD NASSIR · CHENG FAN FAH ·International Journal of Economics and Management ·2018 ·JEL: M42; M41

A corporate cash holding is significant element in the cash and liquidity management. Corporations with higher excessive cash reserves will benefit when high liquidity makes it easier for managers to transfer funds among several of the corporations’ expenses and debts, and allows for more flexibility in managing daily operational activities. However, it raise some issue as firm with higher cash holdings tend to explore to higher agency cost due to the conflict of interest between ownership and management. This study employs data envelopment analysis (DEA) estimation and two-stage regressions model. The findings conclude that the firm size, firm growth, and gross domestic product (GDP) are statistically significant for firm efficiency in both markets. The cash holdings help improve firm efficiency as the adjusted R-square is significantly increased for all models. However, the cash holdings are not related to the efficiency of high-cash holding firms for these two stock exchanges. The contribution of cash holdings to firm efficiency is higher, and even double for a developed market compared with a developing market (Bursa Malaysia), which shows that the development stage of a country impacts on cash holdings’ contribution to firm efficiency.

Maya Puspa Rahmana · Nurfatihah Senusia ·Malaysian Journal of Consumer and Family Economics ·2019

This study explores the understanding, role and participation of the SMEs on digital economy, in line with the aspiration by the Malaysian government to have higher growth contribution coming from this segment. The primary data is collected from a semi-structured interview with six SMEs around Klang Valley from various industries and the analysis is conducted using coding and thematic analysis. Most of the SMEs interviewed are aware on the importance of online presence but lack the understanding on its contribution towards digital economy. While a high number of them are ready to embrace technology driven tools for sales, several others are still quite skeptical and facing difficulties in related cost management. This paper aims to offer specific insights from the SMEs on digital economy and the Malaysia’s move towards adopting the relevance of the fourth industrial revolution. It also identifies some of the issues to be tackled by the government in order to have more SMEs participation in the Malaysian digital economy.

Mohammad Shahansha Molla · Mohammad Tariq Hasan · Mahadi Hasan Miraz · Mohammad Tahlil Azim · Md. Kaium Hossain ·Journal of Asian Finance, Economics and Business ·2021 ·JEL: M1, M4, M48, Q56

This study aims to examine the relationship between directors’ diversity (DIRDIV) and financial performance (FP) with a particular focus on the moderating effect of corporate sustainability practices (CSP). The study analyzes a sample of 104 firms listed on the Bursa Malaysia for the period from 2015 to 2017. Directors’ diversity is measured by the Blau index, and Tobin’s Q is used as a proxy of FP of the firms while the content analysis method is adopted to measure CSP. The study also employs three control variables, namely, board size, firm size, and leverage. Panel corrected standard errors (PCSE) estimator model has been used to test the hypotheses by STATA software. It is found that directors’ diversity in terms of independent and non-independent directors significantly and positively affect the financial performance of the firms. Furthermore, this study reveals that CSP significantly moderates the relationship between directors’ diversity and financial performance. This study suggests that the government and regulatory bodies should put more emphasis on diversifying the board and follow up the mandatory CSP to enhance financial performance of the firms, which is likely to ensure their long-term survival and to reduce the risk of collapse in the future.