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Political connection types and investors’ perceived risk : evidence from Malaysia

This study examines the pervasive political influence in Malaysian businesses, specifically the investors’ perceived risk of political connection. A sample of 312 firm-year observations between 2014 to 2017 reveals that politically connected Malaysian firms are less likely to be perceived as risky...

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Main Authors: Mas Nordiana Rusli,, Norman Mohd. Saleh,, Hafizuddin-Syah B.A.M.,, Mohamat Sabri Hassan,
Format: Article
Language:English
Published: Penerbit Universiti Kebangsaan Malaysia 2019
Online Access:http://journalarticle.ukm.my/19182/1/35874-118969-1-PB.pdf
http://journalarticle.ukm.my/19182/
https://ejournal.ukm.my/ajac/issue/view/1225
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spelling my-ukm.journal.191822022-08-02T03:30:32Z http://journalarticle.ukm.my/19182/ Political connection types and investors’ perceived risk : evidence from Malaysia Mas Nordiana Rusli, Norman Mohd. Saleh, Hafizuddin-Syah B.A.M., Mohamat Sabri Hassan, This study examines the pervasive political influence in Malaysian businesses, specifically the investors’ perceived risk of political connection. A sample of 312 firm-year observations between 2014 to 2017 reveals that politically connected Malaysian firms are less likely to be perceived as risky compared with their non-connected peers. In particular, reduction of systematic risk in cost of equity as a proxy to perceived risk is more significant for firms connected through directorship because political figures effectively channel substantial benefits in connecting firms under his/her political power. The link between types of political connections and investors’ perceived risk provides a new insight and direction for research about governance factors that affect firm risks. Penerbit Universiti Kebangsaan Malaysia 2019 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/19182/1/35874-118969-1-PB.pdf Mas Nordiana Rusli, and Norman Mohd. Saleh, and Hafizuddin-Syah B.A.M., and Mohamat Sabri Hassan, (2019) Political connection types and investors’ perceived risk : evidence from Malaysia. Asian Journal of Accounting and Governance, 12 . pp. 65-76. ISSN 2180-3838 https://ejournal.ukm.my/ajac/issue/view/1225
institution Universiti Kebangsaan Malaysia
building Tun Sri Lanang Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Kebangsaan Malaysia
content_source UKM Journal Article Repository
url_provider http://journalarticle.ukm.my/
language English
description This study examines the pervasive political influence in Malaysian businesses, specifically the investors’ perceived risk of political connection. A sample of 312 firm-year observations between 2014 to 2017 reveals that politically connected Malaysian firms are less likely to be perceived as risky compared with their non-connected peers. In particular, reduction of systematic risk in cost of equity as a proxy to perceived risk is more significant for firms connected through directorship because political figures effectively channel substantial benefits in connecting firms under his/her political power. The link between types of political connections and investors’ perceived risk provides a new insight and direction for research about governance factors that affect firm risks.
format Article
author Mas Nordiana Rusli,
Norman Mohd. Saleh,
Hafizuddin-Syah B.A.M.,
Mohamat Sabri Hassan,
spellingShingle Mas Nordiana Rusli,
Norman Mohd. Saleh,
Hafizuddin-Syah B.A.M.,
Mohamat Sabri Hassan,
Political connection types and investors’ perceived risk : evidence from Malaysia
author_facet Mas Nordiana Rusli,
Norman Mohd. Saleh,
Hafizuddin-Syah B.A.M.,
Mohamat Sabri Hassan,
author_sort Mas Nordiana Rusli,
title Political connection types and investors’ perceived risk : evidence from Malaysia
title_short Political connection types and investors’ perceived risk : evidence from Malaysia
title_full Political connection types and investors’ perceived risk : evidence from Malaysia
title_fullStr Political connection types and investors’ perceived risk : evidence from Malaysia
title_full_unstemmed Political connection types and investors’ perceived risk : evidence from Malaysia
title_sort political connection types and investors’ perceived risk : evidence from malaysia
publisher Penerbit Universiti Kebangsaan Malaysia
publishDate 2019
url http://journalarticle.ukm.my/19182/1/35874-118969-1-PB.pdf
http://journalarticle.ukm.my/19182/
https://ejournal.ukm.my/ajac/issue/view/1225
_version_ 1740826821764579328
score 13.211869

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