Title: Does CEO ownership matter in Malaysian government-controlled firms' performance?

Authors: Irene Wei Kiong Ting; Noor Azlinna Azizan; Qian Long Kweh

Addresses: Department of Finance and Economics, College of Business Management and Accounting, Universiti Tenaga Nasional, Sultan Haji Ahmad Shah Campus, 26700 Muadzam Shah, Pahang, Malaysia ' Faculty of Technology, Universiti Malaysia Pahang, Lebuhraya Tun Razak, 26300 Kuantan, Pahang, Malaysia ' Department of Accounting, College of Business Management and Accounting, Universiti Tenaga Nasional, Sultan Haji Ahmad Shah Campus, 6700 Muadzam Shah, Pahang, Malaysia

Abstract: This paper examines the relationship between chief executive officers (CEO) ownership, governmental control and firm performance as well as the moderating effect of government-linked companies (GLCs) on the relationship between CEO ownership and firm performance in Malaysian listed companies. Using an unbalanced panel data for the period from 2003 to 2010, this study develops two ordinary least squares regression models. The main findings of the analysis indicate that CEO ownership and governmental control have significantly positive impacts on Tobin's Q. Our result also reveals that governmental control as moderating variable has strengthened the relationship between CEO ownership and performance. The results support the agency theory (Jensen and Meckling, 1976) which argues that agency conflict arises because of the managers' self-interest behaviour. Managers may have personal goals that compete with the owner's goal in maximising shareholders' wealth.

Keywords: CEO ownership; government-linked companies; GLCs; firm performance; agency theory; self-interest; self-interested behaviour; Malaysia; chief executive officers; CEOs; governmental control; ordinary least squares; OLS; agency conflict; personal goals.

DOI: 10.1504/JIBED.2015.070800

Journal for International Business and Entrepreneurship Development, 2015 Vol.8 No.3, pp.268 - 280

Available online: 24 Jul 2015 *

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