Ethnicity, politics and firm performance: Evidence from Malaysia

Ferdinand A. Gul; Sa'adiah Munir; Liang Zhang

doi:10.1016/j.pacfin.2016.10.005

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Ethnicity, politics and firm performance: Evidence from Malaysia

Journal article

Peer reviewed

Ethnicity, politics and firm performance: Evidence from Malaysia

Ferdinand A. Gul, Sa'adiah Munir and Liang Zhang

Pacific-Basin Finance Journal, Vol.40(Part A), pp.115-129

2016

DOI: https://doi.org/10.1016/j.pacfin.2016.10.005

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Abstract

Employee relation responsibility (ERR)

Power distance

Collectivism

Masculinity

Risk avoidance

Firm value

Motivated by the inconclusive evidence on the role of ethnic diversity of directors and the limited research, this study examines whether there is an association between board ethnic diversity in Malaysian firms and firm performance. We find that the association between ethnic diversity of boards and firm performance is non linear; at low levels of ethnic diversity there is a positive association but at higher levels of ethnic diversity, the association is negative. However, when we split the, sample into politically and non politically connected firms, we find that this association only holds for non politically firms. Further, when we split our politically connected sample into Malay and non Malay, dominant boards, we find generally, that in both groups of firms, board ethnic diversity does not influence firm performance. Overall, these results suggest that the presence of political connection could undermine the role of ethnic diversity in influencing firm performance.

Details

Title: Ethnicity, politics and firm performance: Evidence from Malaysia
Authors: Ferdinand A. Gul (Author) - Deakin University
Sa'adiah Munir (Corresponding Author) - Monash University Malaysia
Liang Zhang (Author) - Monash University Malaysia
Publication details: Pacific-Basin Finance Journal, Vol.40(Part A), pp.115-129
Publisher: Elsevier BV
DOI: 10.1016/j.pacfin.2016.10.005
Organisation Unit: University of the Sunshine Coast, Queensland; School of Business and Creative Industries
Language: English
Record Identifier: 99679190602621
Output Type: Journal article

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Collaboration types: Domestic collaboration; International collaboration
Web Of Science research areas: Business, Finance

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