Article: Climate change impacts on yield and financial performance of agro-plantation companies in Malaysia Journal: International Journal of Postharvest Technology and Innovation (IJPTI) 2020 Vol.7 No.1 pp.15 - 28 Abstract: In Malaysia, there is a declining trend in agricultural productivity and crop yields due to various climate events in the recent years. Therefore, this study aims to examine the impacts of climate change, especially El Nino and flood, on the financial performance of Malaysian agro and plantation firms. The study used a panel dataset on 33 Malaysian agro and plantation firms listed in Bursa Malaysia for the period of 2003 to 2016. A panel of regression models including GMM, pooled OLS, random effect and fixed effect were used to analyse the data. The results show that both the El Nino and flood have significant negative impact on the firms' financial performance as measured by ROA and ROE. The findings indicate that climate change results in reduction of agricultural production which reduces revenue and consequently the profit of the agro and plantation firms. The study findings might help the firm managers as well as policy makers to take into consideration the environmental factors that affect the overall financial health of the firms and take appropriate adaptation and mitigation policies to climate change at firm level and macro level in the country. Inderscience Publishers - linking academia, business and industry through research

Title: Climate change impacts on yield and financial performance of agro-plantation companies in Malaysia

Authors: Md. Mahmudul Alam; Yusnidah Ibrahim; Md. Shahin Mia

Addresses: School of Economics, Finance and Banking, Universiti Utara Malaysia, Malaysia ' School of Economics, Finance and Banking, Universiti Utara Malaysia, Malaysia ' School of Economics, Finance and Banking, Universiti Utara Malaysia, Malaysia

Abstract: In Malaysia, there is a declining trend in agricultural productivity and crop yields due to various climate events in the recent years. Therefore, this study aims to examine the impacts of climate change, especially El Nino and flood, on the financial performance of Malaysian agro and plantation firms. The study used a panel dataset on 33 Malaysian agro and plantation firms listed in Bursa Malaysia for the period of 2003 to 2016. A panel of regression models including GMM, pooled OLS, random effect and fixed effect were used to analyse the data. The results show that both the El Nino and flood have significant negative impact on the firms' financial performance as measured by ROA and ROE. The findings indicate that climate change results in reduction of agricultural production which reduces revenue and consequently the profit of the agro and plantation firms. The study findings might help the firm managers as well as policy makers to take into consideration the environmental factors that affect the overall financial health of the firms and take appropriate adaptation and mitigation policies to climate change at firm level and macro level in the country.

Keywords: climate change; El Nino; flood; agro firm; plantation firm; financial performance; return on assets; ROA; return on equity; ROE; panel regression; Malaysia.

DOI: 10.1504/IJPTI.2020.108741

International Journal of Postharvest Technology and Innovation, 2020 Vol.7 No.1, pp.15 - 28

Received: 21 Dec 2019
Accepted: 24 Dec 2019
Published online: 30 Jul 2020 *

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Title: Climate change impacts on yield and financial performance of agro-plantation companies in Malaysia

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