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Nexus Between Corporate Governance and Firm Performance in Malaysia: Supervised Machine Learning Approach

Journal: Financial Markets, Institutions and Risks (FMIR) (Vol.3, No. 1)

Publication Date:

Authors : ;

Page : 115-130

Keywords : Corporate Governance; Technology Firms; Financial Performance; Machine Learning..;

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In the wake of the Asian Financial Crisis in 1997 which had significantly affected Malaysia' economy, there has been a renewed emphasis on corporate governance in order to make companies more effective and to further mitigate risks. However, despite the importance of the emerging technology companies in Malaysia in consideration of the modern internet age, there has not been many studies conducted on the Malaysian technology sector in respect of corporate governance. This study aims to partially bridge the research gap by investigating the relationship between selected corporate governance attributes and financial performance of Malaysian technology companies. This study involves 27 Malaysian technology companies listed on Bursa Malaysia, using annual data from the year 2010 to 2014. A multiple regression analysis was iii employed to examine the relationship between selected corporate governance attributes of the companies and their financial performance, relying on the financial ratios, namely Return on Assets and Return on Equity. Measures of corporate governance attributes employed are independent directors on the board, board gender diversity and independent audit committee. The results showed that board gender diversity had a positive impact on the financial performance of Malaysian technology companies, while the effects of independent directors and independent audit committee are not established.

Last modified: 2020-01-09 20:37:22