Stock Market Liberalisation And Cost Of Equity: Firm-Level Evidence From Malaysia
This study extends the stock market liberalisation literature by conducting a firm-level analysis on the emerging economy of Malaysia. Using a finer measure of foreign ownership, we explore the association between liberalisation and cost of equity for public listed firms on Bursa Malaysia over th...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Asian Academy of Management (AAM)
2016
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| Subjects: | |
| Online Access: | http://eprints.usm.my/37374/1/aamjaf120s16_02.pdf |
| _version_ | 1797009818410549248 |
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| author | Swee, Sim Foong Kian, Ping Lim |
| author_facet | Swee, Sim Foong Kian, Ping Lim |
| author_sort | Swee, Sim Foong |
| collection | USM |
| description | This study extends the stock market liberalisation literature by conducting a firm-level
analysis on the emerging economy of Malaysia. Using a finer measure of foreign
ownership, we explore the association between liberalisation and cost of equity for public
listed firms on Bursa Malaysia over the sample period of 2002-2009. We find strong
support for our hypothesis that total foreign ownership is negatively and significantly
associated with cost of equity. Further disaggregate analysis suggests foreign institutions
that trade through direct accounts are driving the lower cost of equity. When the model is
extended to include interaction term, we find that an effective board of directors further
strengthens the negative relationship between foreign institutions and cost of equity. Our
empirical results consistently support the corporate governance channel in which foreign
institutions play an active monitoring role. |
| first_indexed | 2024-03-06T15:10:57Z |
| format | Article |
| id | usm.eprints-37374 |
| institution | Universiti Sains Malaysia |
| language | English |
| last_indexed | 2024-03-06T15:10:57Z |
| publishDate | 2016 |
| publisher | Asian Academy of Management (AAM) |
| record_format | dspace |
| spelling | usm.eprints-373742017-11-14T02:16:10Z http://eprints.usm.my/37374/ Stock Market Liberalisation And Cost Of Equity: Firm-Level Evidence From Malaysia Swee, Sim Foong Kian, Ping Lim HD28-70 Management. Industrial Management This study extends the stock market liberalisation literature by conducting a firm-level analysis on the emerging economy of Malaysia. Using a finer measure of foreign ownership, we explore the association between liberalisation and cost of equity for public listed firms on Bursa Malaysia over the sample period of 2002-2009. We find strong support for our hypothesis that total foreign ownership is negatively and significantly associated with cost of equity. Further disaggregate analysis suggests foreign institutions that trade through direct accounts are driving the lower cost of equity. When the model is extended to include interaction term, we find that an effective board of directors further strengthens the negative relationship between foreign institutions and cost of equity. Our empirical results consistently support the corporate governance channel in which foreign institutions play an active monitoring role. Asian Academy of Management (AAM) 2016 Article PeerReviewed application/pdf en http://eprints.usm.my/37374/1/aamjaf120s16_02.pdf Swee, Sim Foong and Kian, Ping Lim (2016) Stock Market Liberalisation And Cost Of Equity: Firm-Level Evidence From Malaysia. Asian Academy of Management Journal of Accounting and Finance, 12 (1). pp. 1-24. ISSN 1823-4992 http://web.usm.my/journal/aamjaf/12-s-2-2016.html |
| spellingShingle | HD28-70 Management. Industrial Management Swee, Sim Foong Kian, Ping Lim Stock Market Liberalisation And Cost Of Equity: Firm-Level Evidence From Malaysia |
| title | Stock Market Liberalisation And Cost Of
Equity: Firm-Level Evidence From Malaysia |
| title_full | Stock Market Liberalisation And Cost Of
Equity: Firm-Level Evidence From Malaysia |
| title_fullStr | Stock Market Liberalisation And Cost Of
Equity: Firm-Level Evidence From Malaysia |
| title_full_unstemmed | Stock Market Liberalisation And Cost Of
Equity: Firm-Level Evidence From Malaysia |
| title_short | Stock Market Liberalisation And Cost Of
Equity: Firm-Level Evidence From Malaysia |
| title_sort | stock market liberalisation and cost of equity firm level evidence from malaysia |
| topic | HD28-70 Management. Industrial Management |
| url | http://eprints.usm.my/37374/1/aamjaf120s16_02.pdf |
| work_keys_str_mv | AT sweesimfoong stockmarketliberalisationandcostofequityfirmlevelevidencefrommalaysia AT kianpinglim stockmarketliberalisationandcostofequityfirmlevelevidencefrommalaysia |