Corporate Governance Mechanisms with Firm Performance: A Study on Malaysia's and Hong Kong's Real Estate Investment Trust (REITs) Public Listed Companies
DOI:
https://doi.org/10.31098/jgrcs.v1i1.511Keywords:
Corporate Governance, Real Estate Investment Trust (REITs), Panel data analysisAbstract
Corporate governance (CG) mechanisms might have a significant effect on firm performance (FP). The purpose of this study was to evaluate if CG mechanisms impact the FP among Malaysia's REITs (M-REITs) and Hong Kong's REITs (H-REITs). The effect of CG's variable on FP can be analyzed by using Panel data analysis. Return on Assets (ROA), Return on Equity (ROE) and Tobin's Q were employed to measure the FP. Data were collected from the annual report available on Bursa Malaysia and the Stock Exchange of Hong Kong Limited for 2010 until 2019. The finding suggests that H-REITs were more significantly affected by CG mechanisms as compared to M-REITs.
Downloads
References
Adams, R., & Ferreira, D. (2009). Women in the boardroom and their impact on governance and performance. Journal of Financial Economics, 94(2), 291-309.
Almoneef, A., & Samontaray, D. (2019). Corporate governance and firm performance in the Saudi banking industry. Banks and Bank Systems, 14(1), 147-158. doi:10.21511/bbs.14(1).2019.13
Ameer, R., Ramli, F., & Zakaria, H. (2010). A new perspective on board composition and firm performance in an emerging markert. The International Journal of Business in Society, 10(5), 647-661. doi:10.1108/14720701011085607
Astami, E., & Rusmin, R. (2020). Corporate governance and earnings management: The role of board of directors and audit committee in financially distressed firms. International Journal of Service Management and Sustainability, 3(1), 113-144. doi:10.24191/ijsms.v3i1.8046.
Babu, E., & Appiah, K. (2017). Determinants of board monitoring effectiveness in Anglo countries in West Africa: An empirical investigation. Business, Management and Economics Research, 3(9), 159-169.
Bansal, D., & Singh, S. (2021). Does board structure impact a firm's financial performance? Evidence from the Indian software sector. American Journal of Business, 96-104. doi:10.1108/AJB-08-2020-0125
Bedchuk, L., & Weisbach, M. (2010). The state of corporate governance research. The Review of Financial Studies, 23(3), 939-961. doi:10.1093/rfs/hhp121
Bhagat, S., & Black, B. (2002). The non-correlation between board independence and long-term firm performance. Journal of Corporation Law, 27, 231-273.
Bhatt, R. R., & Bhattacharya, S. (2015). Do board characteristics impact firm performance? An agency and resource dependency theory perspective. Asia-Pacific Journal of Management Research and Innovation, 103-116. doi:10.1177/2319510X15602973
Brahma, S., Nwafor, C., & Boateng, A. (2020). Board gender diversity and firm performance: The UK evidence. International Journal of Finance & Economics, 1-16. doi:10.1002/ijfe.2089
Brown, L., & Caylor, M. (2004). Corporate Governance and Firm Performance. SSRN Electronic Journal. Retrieved from http://ssrn.com/abstract=586423
Chbib, I., & Page, M. (2020). Board composition and firm performance: The case of FTSE all shares. IUP Journal of Corporate Governance, 19(1), 7-27.
Chong, W., Ting, K., & Cheng, F. (2017). The performance of externally managed REITs in Asia: Further evidence from free cash flow and agency costs. Journal of Property Investment & Finance, 35(2), 200-227. doi:10.1108/JPIF-08-2016-0067
Choo, K., Hussain, M., Muhammad, F., & Chan, P. (2021). The principles of Malaysia islamic real estate investment trust: Contemporary Islamic core values. ournal of Contemporary Issues and Thought, 11(1), 97-108. Retrieved from https://ojs.upsi.edu.my/index.php/JCIT/article/view/4817
Conyon, M., & He, L. (2017). Firm performance and boardroom gender diversity: A quantile regression approach. 1-8. doi:10.2139/ssrn.2748558
Dakhlallh, M., Rashid, N., & Abdullah, H. (2021). The moderate effect of audit committee independence on the board structure and real earnings management: Evidence from Jordan. Journal of Contemporary Issues in Business and Government, 27(2), 123-133. doi:10.47750/cibg.2021.27.02.016
Dakhlallh, M., Rashid, N., Abdullah, W., & Shehab, H. (2020). Audit committee and Tobin's Q as a measure of firm performance among Jordanian companies. Journal of Advance Research in Dynamical & Control Systems, 12(1), 28-41. doi:10.5373/JARDCS/V12I1/20201005
Farell, K., & Hersch, P. (2005). Additions to corporate boards: the effect of gender. Journal of Corporate Finance, 11(1-2), 85-106.
Ganguli, S., & Deb, S. (2021). Board composition, ownership structure and firm performance: New Indian evidence. International Journal of Disclosure and Governance, 54-67. doi:10.1057/s41310-021-00113-5
Ghabayen, M. A. (2012). Board characteristics and firm performance: Case of Saudi Arabia. International Journal of Accounting and Financial Reporting, 2(2), 168-200. doi:10.5296/ijafr.v2i2.2145
Ghazali, N. (2010). Corporate governance and voluntary disclosure in Malaysia. International Journal of Business Governance and Ethics, 5(4), 261-279.
Gurusamy, P. (2017). Board characteristics, audit committee and ownership structure influence on firm performance of manufacturing firms in India. International Journal of Business and Economics Research, 6(4), 73-87. doi:10.11648/j.ijber.20170604.16
Hassan, I., Caren, O., & Jeremiah, N. (2019). Effect of gender diversity on the financial performance of insurance firms in Kenya. International Journal of Research in Business and Social Science, 8(5), 274-285. doi:10.20525/ijrbs.v8i5.495
Heenetigala, K., & Aemstrong, A. (2011). The impact of corporate governance on firm performance in an unstable economic and political environment: Evidence from Sri Lanka. 2012 Financial Markets & Corporate Governance Conference, 5-11. doi:10.2139/ssrn.1971927
Herli, M., Tjahjadi, B., & Hafidhah, H. (2021). Gender diversity on board of directors and intellectual capital disclosure in Indonesia. The Journal of Asian Finance, Economics and Business, 8(1), 135-144. doi:10.13106/jafeb.2021.vol8.no1.135
Hussin, N., & Othman, R. (2012). Code of corporate governance and firm performance. British Journal of Economics, Finance and Management Sciences, 6(2), 1-22.
Ishaq, M., & Ghouse, G. (2021). Tobin’s Q as an indicator of firm performance: Empirical evidence from manufacturing sector firms of Pakistan,". International Journal of Economics & Business Administration(1), 425-441.
Ji, J., Talavera, O., & Yin, S. (2020). Frequencies of board meetings on various topics and corporate governance: evidence from China. Review of Quantitative Finance and Accounting, 54, 69-110. doi:10.1007/s11156-018-00784-2
Kanakriyah. (2021). The impact of board of directors' characteristics on firm performance: A case study in Jordan. The Journal of Asian Finance, Economics and Business, 8(3), 341-350. doi:10.13106/jafeb.2021.vol8.no3.0341
Khaleel, I., Siti, Z., & Shamharir, A. (2016). Board meeting and firm performance: Evidence from the Amman Stock Exchange. Corporate Board: role, duties and composition, 12(2), 6-11. doi:10.22495/cbv12i2art1
Khan, H. (2011). A literature review of corporate governance. International Conference on E-Business, Managemebt and Economics, 25, 1-5.
Khan, M., Jabri, Q., & Saif, N. (2019). Dynamic relationship between corporate board structure and firm performance: Evidence from Malaysia. International Journal of Finance & Economics, 26(1), 664-661. doi:10.1002/ijfe.1808
Koutoupis, A., & Bekiaris, M. (2019). Audit committee impact on company performance: The Greek & Italian experience. International Journal of Auditing and Accounting Studies, 1(1), 1-12.
Lecomte, P., & Ooi, J. (2012). Corporate governance and performance of externally managed Singapore real estate investment trusts. The Journal of Real Estate Financa and Economics, 46(4), 1-21.
Liu, J., Cheng, C., Yang, X., Yan, L., & Lai, Y. (2019). Analysis of the efficiency of Hong Kong REITs market based on Hurst exponent. Physica A: Statistical Mechanics and its Applications, 534(C), 1-16. doi:10.1016/j.physa.2019.122035
Malik, M., & Makhdoom, D. (2016). Does corporate governance beget firm performance in Fortune Global 500 companies? Corporate Governance, 16(4), 747-746. doi:10.1108/CG-12-2015-0156
Mansur, H., & Tangl, M. (2018). The effect of corporate governance on the financial structure of listed companies in the Egyptian Stock Exchange. Journal of Advanced Management Science, 6(2), 97-102. doi:10.2139/ssrn.2954958
Newell, G., & Osmadi, A. (2009). The development and preliminary performance analysis of Islamic REITs in Malaysia. Journal of Property Research, 26(4), 329-347. doi:10.1080/09599916.2009.485417
Nicholson, J., & Stevens, J. (2021). REIT operational efficiency: External advisement and management. The Journal of Real Estate Finance and Economics, 1-18. doi:10.1007/s11146-021-09818-4
Nor, N., Nawawi, A., & Salin, S. (2018). The impact of audit committee independence and auditor. Pertanika Journal of Social Sciences & Humanities, 26(3), 1433-1454.
Norazian, & Radish. (2012). Code of corporate governance and firm performance. British Journal of Economics, Finance and Management Sciences, 6(2), 1-18.
Norziaton, I., & Hafizah, S. (2019). Audit committee and financially distressed firms in Malaysia. International Journal of Accounting, Finance and Business, 4(18), 92-107.
Ooi, J., Newell, G., & Sing, T. (2006). The growth of real estate investment trust markerts in Asia. Journal of Real Estate Literature(14), 203-222.
Pitcher, P., Chreim, S., & Kisfalvi, V. (2000). CEO succession research: Methodological bridges over troubled waters. Strategic Management Journal, 21(6), 75-86. doi:10.1002/(SICI)1097-0266(200006)21:63.0.CO
Puni, A., & Anlesinya, A. (2020). Corporate governance mechanisms and firm performance in a developing country. International Journal of Law and Management, 62(2), 147-169. doi:10.1108/IJLMA-03-2019-0076
Ramachandran, J., Chen, K. K., Subramanian, R., Yeoh, K., & Khong, K. (2018). Corporate governance and performance of REITs: A combined study of Singapore and Malaysia. Managerial Auditing Journal, 33(6/7), 586-612. doi:10.1108/MAJ-09-2016-1445
Rashid, M. (2020). Ownership structure and firm performance: the mediating role of board characteristics. Corporate Governance, 20(4), 719-737. doi:10.1108/CG-02-2019-0056
Saeed, A., Mukarram, S., & Belghitar, Y. (2021). Read between the lines: Board gender diversity, family ownership, and risk?taking in Indian high?tech firms. International Journal of Finance & Economics, 26(1), 185-207. doi:10.1002/ijfe.1784
Samiloglu, F., Oztop, A., & Kahraman, Y. (2017). The determinants of firm financial performance: Evidence from Istanbul Stock Exchange (BIST). IOSR Journal of Economics and Finance, 8(6), 62-67. doi:10.9790/5933-0806016267
Schrand, L., Freybote, J., & Schaefers, W. (2021). Do REIT investors care? An investigation into the market response to the public release of SEC comment letter correspondences. Journal of Property Research, 1-13. doi:10.1080/09599916.2021.1903067
Song, H., Yoon, Y., & Kang, K. (2020). The relationship between board diversity and firm performance in the lodging industry: The moderating role of internationalization. International Journal of Hospitality Management, 86, 56-64. doi:10.1016/j.ijhm.2020.102461
Souther, M. (2021). Does board independence increase firm value? Evidence from closed-end funds. Journal of Financial and Quantitative Analysis, 56(1), 313-336. doi:10.1017/S0022109019000929
Talukdar, B., Soyeh, K., & Parhizgari, A. (2021). Insider ownership, corporate diversification, and firm value: Evidence from REITs. Journal of Real Estate Research, 43(1), 1-20. doi:10.1080/08965803.2021.1885960
Ullah, S., & Kamal, Y. (2020). Corporate Governance, Political Connections and Firm Performance: The Role of Political Regimes and Size. Global Business Review, 1-21. doi:10.1177/0972150919876520
Waheed, a., & Malik, Q. (2021). Institutional ownership board characteristics and firm performance: A contingent theoretical approach. International Journal of Asian Business and Information Management, 12(2), 1-15. doi:10.4018/IJABIM.20210401.oa1
Wang, Y., Abbasi, K., & Babajide, B. (2020). Corporate governance mechanisms and firm performance: evidence from the emerging market following the revised CG code. Corporate Governance, 20(1), 158-174. doi:10.1108/CG-07-2018-0244
Weterings , J., & Swagerman, D. (2012). The impact of board size on firm value: Evidence from the Asian real estate industry. Asian Journal of Business and Management Sciences, 1(8), 22-43.
Wong, Y. (2015). Malaysia REIT: First decade development and returns characteristics. 21st Annual Pacific-Rim Real Estate Society Conference (pp. 1-37). Kuala Lumpur: International Real Estate Review (Forthcoming). doi:10.2139/ssrn.2555174
Wong, Y. (2016). Malaysia REITs: First decade development and returns characteristics. International Real Estate Review, Global Social Science Institute, 19(3), 371-409.
Wu, C. (2021). Relationships between Corporate Governance and Firm Performance. Journal of Risk and Financial MANAGEMENT, 14, 1-13. doi:10.3390/jrfm14030140
Zabri, S., Ahmad, K., & Wah, K. (2016). Corporate governance practices and firm performance: Evidence from Top 100 public listed companies in Malaysia. Procedia Economics and Finance, 35, 287-296. doi:10.1016/S2212-5671(16)00036
Zhang, L. (2020). An institutional approach to gender diversity and firm performance. Organization Science, 1-19. doi:10.1287/orsc.2019.1297
Downloads
Article Metrics
- 502 times
- 604 times
Published
Citation Check
How to Cite
Issue
Section
License
Copyright (c) 2021 David, Ching Yat Ng, Yen Wen Chang, Low Suet Cheng
This work is licensed under a Creative Commons Attribution-NonCommercial 4.0 International License.
Content Licensing, Copyright, and Permissions
1. License
Journal of Governance Risk Management Compliance and Sustainability (JGRCS) has CC-BY NC or an equivalent license as the optimal license for the publication, distribution, use, and reuse of scholarly work for non-commercial purpose. The non-commercial use of the article will be governed by the Creative Commons Attribution license as currently displayed on Creative Commons Attribution-NonCommercial 4.0 International License
Creative Commons License
2. Author’s Warranties
The author warrants that the article is original, written by stated author(s), has not been published before, contains no unlawful statements, does not infringe the rights of others, is subject to copyright that is vested exclusively in the author and free of any third party rights, and that any necessary written permissions to quote from other sources have been obtained by the author(s).
3. User Rights
Journal of Governance Risk Management Compliance and Sustainability (JGRCS) objective is to disseminate articles published are as free as possible. Under the Creative Commons license, this journal permits users to copy, distribute, display, and perform the work for non-commercial purposes only. Users will also need to attribute authors and this journal on distributing works in the journal.
4. Rights of Authors
Authors retain the following rights:
Copyright, and proprietary rights relating to the article, such as patent rights,
The right to use the substance of the article in future own works, including lectures and books, The right to reproduce the article for own purposes, The right to self-archive the article, the right to enter into separate, additional contractual arrangements for the non-exclusive distribution of the article's published version (e.g., post it to an institutional repository or publish it in a book), with an acknowledgement of its initial publication in this journal (Journal of Governance Risk Management Compliance and Sustainability).
The author has a non-exclusive publishing contract with a publisher and the work is published with a more restrictive license, the author retains all the rights to publish the work elsewhere, including commercially, because she/he is not subject to the conditions of her / his own license, regardless of the type of CC license chosen.
5. Co-Authorship
If the article was jointly prepared by other authors, the signatory of this form warrants that he/she has been authorized by all co-authors to sign this agreement on their behalf, and agrees to inform his/her co-authors of the terms of this agreement.
6. Termination
This agreement can be terminated by the author or Journal of Governance Risk Management Compliance and Sustainability (JGRCS) upon two months’ notice where the other party has materially breached this agreement and failed to remedy such breach within a month of being given the terminating party’s notice requesting such breach to be remedied. No breach or violation of this agreement will cause this agreement or any license granted in it to terminate automatically or affect the definition of Journal of Governance Risk Management Compliance and Sustainability (JGRCS).
7. Royalties
This agreement entitles the author to no royalties or other fees. To such extent as legally permissible, the author waives his or her right to collect royalties relative to the article in respect of any use of the article by This agreement can be terminated by the author or Journal of Governance Risk Management Compliance and Sustainability (JGRCS) upon two months’ notice where the other party has materially breached this agreement and failed to remedy such breach within a month of being given the terminating party’s notice requesting such breach to be remedied. No breach or violation of this agreement will cause this agreement or any license granted in it to terminate automatically or affect the definition of Journal of Governance Risk Management Compliance and Sustainability (JGRCS) or its sublicensee.
8. Miscellaneous
Journal of Governance Risk Management Compliance and Sustainability (JGRCS) will publish the article (or have it published) in the journal if the article’s editorial process is successfully completed and Journal of Governance Risk Management Compliance and Sustainability or its sublicensee has become obligated to have the article published. Journal of Governance Risk Management Compliance and Sustainability may conform the article to a style of punctuation, spelling, capitalization, referencing and usage that it deems appropriate. The author acknowledges that the article may be published so that it will be publicly accessible and such access will be free of charge for the readers
