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COMMITMENT TO ETHICS AND FINANCIAL PERFORMANCE: THE MODERATING ROLES OF INSTITUTIONAL INVESTORS

The lack of ethical transparency signals that Malaysian companies suffer from unethical practices that can impact company value thus raises the concern of information asymmetry and effective monitoring mechanisms. Drawing from the agency theory, this study examines the relationship between compan...

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Main Author: AHMAD FIRDHAUZ BIN ZAINUL ABIDIN
Format: Thesis
Language:English
Published: UNIVERSITI MALAYSIA TERENGGANU 2022
Online Access:http://umt-ir.umt.edu.my:8080/handle/123456789/16011
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record_format eprints
spelling my.umt.ir-160112022-01-19T07:59:00Z COMMITMENT TO ETHICS AND FINANCIAL PERFORMANCE: THE MODERATING ROLES OF INSTITUTIONAL INVESTORS AHMAD FIRDHAUZ BIN ZAINUL ABIDIN The lack of ethical transparency signals that Malaysian companies suffer from unethical practices that can impact company value thus raises the concern of information asymmetry and effective monitoring mechanisms. Drawing from the agency theory, this study examines the relationship between companies’ ethical commitment disclosure proxied by ethical commitment index (ECI), and financial performance (ROA, ROE, EPS, MVA, PE-ratio, and logTOBINq) among Malaysian publicly listed companies. The introduction of the Malaysian Code of Institutional Investors (MCII) motivated this study to examine the moderating role of institutional investors on the relationship between ethical commitment disclosure and financial performance among Malaysian publicly listed companies. This study developed the ECI based on prior literature and the recommendations of the Malaysian Code on Corporate Governance (MCCG). The content analysis of the annual reports of 1115 companies found a slight increment in the level of ECI. However, poor disclosures on implementation of a code of ethics, whistleblowing, disciplinary actions, and ethics committee. Panel data analyses of 1115 companies on Bursa Malaysia from year 2012 to 2016 found that higher ECI is associated with higher company performance. Institutional investors as the moderator weakens the relationship between ECI and performance. Further analyses found that pressure-sensitive investors do not influence the relationship between ECI and performance. 2022-01-19T07:58:38Z 2022-01-19T07:58:38Z 2020 Thesis http://umt-ir.umt.edu.my:8080/handle/123456789/16011 en application/pdf application/pdf UNIVERSITI MALAYSIA TERENGGANU
institution Universiti Malaysia Terengganu
building Perpustakaan Sultanah Nur Zahirah
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Malaysia Terengganu
content_source UMT-IR
url_provider http://umt-ir.umt.edu.my:8080/
language English
description The lack of ethical transparency signals that Malaysian companies suffer from unethical practices that can impact company value thus raises the concern of information asymmetry and effective monitoring mechanisms. Drawing from the agency theory, this study examines the relationship between companies’ ethical commitment disclosure proxied by ethical commitment index (ECI), and financial performance (ROA, ROE, EPS, MVA, PE-ratio, and logTOBINq) among Malaysian publicly listed companies. The introduction of the Malaysian Code of Institutional Investors (MCII) motivated this study to examine the moderating role of institutional investors on the relationship between ethical commitment disclosure and financial performance among Malaysian publicly listed companies. This study developed the ECI based on prior literature and the recommendations of the Malaysian Code on Corporate Governance (MCCG). The content analysis of the annual reports of 1115 companies found a slight increment in the level of ECI. However, poor disclosures on implementation of a code of ethics, whistleblowing, disciplinary actions, and ethics committee. Panel data analyses of 1115 companies on Bursa Malaysia from year 2012 to 2016 found that higher ECI is associated with higher company performance. Institutional investors as the moderator weakens the relationship between ECI and performance. Further analyses found that pressure-sensitive investors do not influence the relationship between ECI and performance.
format Thesis
author AHMAD FIRDHAUZ BIN ZAINUL ABIDIN
spellingShingle AHMAD FIRDHAUZ BIN ZAINUL ABIDIN
COMMITMENT TO ETHICS AND FINANCIAL PERFORMANCE: THE MODERATING ROLES OF INSTITUTIONAL INVESTORS
author_facet AHMAD FIRDHAUZ BIN ZAINUL ABIDIN
author_sort AHMAD FIRDHAUZ BIN ZAINUL ABIDIN
title COMMITMENT TO ETHICS AND FINANCIAL PERFORMANCE: THE MODERATING ROLES OF INSTITUTIONAL INVESTORS
title_short COMMITMENT TO ETHICS AND FINANCIAL PERFORMANCE: THE MODERATING ROLES OF INSTITUTIONAL INVESTORS
title_full COMMITMENT TO ETHICS AND FINANCIAL PERFORMANCE: THE MODERATING ROLES OF INSTITUTIONAL INVESTORS
title_fullStr COMMITMENT TO ETHICS AND FINANCIAL PERFORMANCE: THE MODERATING ROLES OF INSTITUTIONAL INVESTORS
title_full_unstemmed COMMITMENT TO ETHICS AND FINANCIAL PERFORMANCE: THE MODERATING ROLES OF INSTITUTIONAL INVESTORS
title_sort commitment to ethics and financial performance: the moderating roles of institutional investors
publisher UNIVERSITI MALAYSIA TERENGGANU
publishDate 2022
url http://umt-ir.umt.edu.my:8080/handle/123456789/16011
_version_ 1738395567300542464
score 13.211869

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