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Do family-owned banks perform better? A study of Malaysian banking industry

It has been discussed that whether family ownership perform better or less perform than non-family ownership that might create or destroy agency costs among the managers and shareholders. This paper is to investigate the financial performance of family and non-family owned banks in Malaysia from yea...

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Main Authors: Ong, Tze San, Gan, Shih Sze
Format: Article
Language:English
Published: Canadian Center of Science and Education 2013
Online Access:http://psasir.upm.edu.my/id/eprint/28263/1/28263.pdf
http://psasir.upm.edu.my/id/eprint/28263/
http://ccsenet.org/journal/index.php/ass/article/view/27937
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spelling my.upm.eprints.282632017-10-23T04:35:29Z http://psasir.upm.edu.my/id/eprint/28263/ Do family-owned banks perform better? A study of Malaysian banking industry Ong, Tze San Gan, Shih Sze It has been discussed that whether family ownership perform better or less perform than non-family ownership that might create or destroy agency costs among the managers and shareholders. This paper is to investigate the financial performance of family and non-family owned banks in Malaysia from year 2001 to 2010. This study compares the financial performance of family and non-family owned banks that operate under central bank of Malaysia, (BNM) and are listed on Bursa Malaysia. Multiple regression technique was performed to investigate the relationship between independent variable (ownership structure) and dependent variables (Tobin’s Q, ROA and ROE). Findings indicate that Tobin’s Q is the best fit as the dependent variable for the regression model. It shows the highest F statistics value, which is 6.247 as compared to ROA and ROE for full sample. Meanwhile, the adjusted R squared of Tobin’s Q indicates similar higher value as well that is 0.150 between the dependent variables. Board composition and board size indicate strong influence on the performance of family-owned banks. Smaller board size on the board can help the bank to achieve better performance in term of Tobin’s Q and ROE. In contrast, board composition attains better performance in term of ROA rather than Tobin’s Q and ROE. This study can provide useful insights of the governance mechanism that could influence the firm performance. Canadian Center of Science and Education 2013 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/28263/1/28263.pdf Ong, Tze San and Gan, Shih Sze (2013) Do family-owned banks perform better? A study of Malaysian banking industry. Asian Social Science, 9 (7). pp. 124-135. ISSN 1911-2017; ESSN: 1911-2025 http://ccsenet.org/journal/index.php/ass/article/view/27937 10.5539/ass.v9n7p124
institution Universiti Putra Malaysia
building UPM Library
collection Institutional Repository
continent Asia
country Malaysia
content_provider Universiti Putra Malaysia
content_source UPM Institutional Repository
url_provider http://psasir.upm.edu.my/
language English
description It has been discussed that whether family ownership perform better or less perform than non-family ownership that might create or destroy agency costs among the managers and shareholders. This paper is to investigate the financial performance of family and non-family owned banks in Malaysia from year 2001 to 2010. This study compares the financial performance of family and non-family owned banks that operate under central bank of Malaysia, (BNM) and are listed on Bursa Malaysia. Multiple regression technique was performed to investigate the relationship between independent variable (ownership structure) and dependent variables (Tobin’s Q, ROA and ROE). Findings indicate that Tobin’s Q is the best fit as the dependent variable for the regression model. It shows the highest F statistics value, which is 6.247 as compared to ROA and ROE for full sample. Meanwhile, the adjusted R squared of Tobin’s Q indicates similar higher value as well that is 0.150 between the dependent variables. Board composition and board size indicate strong influence on the performance of family-owned banks. Smaller board size on the board can help the bank to achieve better performance in term of Tobin’s Q and ROE. In contrast, board composition attains better performance in term of ROA rather than Tobin’s Q and ROE. This study can provide useful insights of the governance mechanism that could influence the firm performance.
format Article
author Ong, Tze San
Gan, Shih Sze
spellingShingle Ong, Tze San
Gan, Shih Sze
Do family-owned banks perform better? A study of Malaysian banking industry
author_facet Ong, Tze San
Gan, Shih Sze
author_sort Ong, Tze San
title Do family-owned banks perform better? A study of Malaysian banking industry
title_short Do family-owned banks perform better? A study of Malaysian banking industry
title_full Do family-owned banks perform better? A study of Malaysian banking industry
title_fullStr Do family-owned banks perform better? A study of Malaysian banking industry
title_full_unstemmed Do family-owned banks perform better? A study of Malaysian banking industry
title_sort do family-owned banks perform better? a study of malaysian banking industry
publisher Canadian Center of Science and Education
publishDate 2013
url http://psasir.upm.edu.my/id/eprint/28263/1/28263.pdf
http://psasir.upm.edu.my/id/eprint/28263/
http://ccsenet.org/journal/index.php/ass/article/view/27937
_version_ 1643829413753651200
score 13.211869

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