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We investigate the association between dividend policy and government shareholding, using Malaysian data. We hypothesize a positive association. We contribute to the literature about dividend policy. Unique features of our study include adaptations to the Malaysian institutional setting, with respect to usage of dividend relevance theory, research methodology, and data collection. The methodology entails two-stage least squares regressions. Dividend payout and dividend yield are the dependent variables in tests of the research hypothesis. The independent variable of interest measures ownership by government-related institutional investors. The sample comprises 1190 company-years, over the investigation period 2006–2013. The results support our hypothesis. The evidence suggests that this support principally emanates from companies with low-quality corporate governance.

Purpose The purpose of this paper is to investigate the factors that influence Malaysian manufacturing sector investment in accounts receivable (AR), an asset seen by many as one of the riskiest in any company’s balance sheet. Design/methodology/approach The authors test several theories, related to AR, using a cross-section of 262 listed manufacturing firms over a period of five years (2007-2011). Both fixed and random effect approaches are adopted to deal with potential heterogeneity across firms. Findings The results show that investment in AR in Malaysia are influenced by firm size, short-term finance, sales growth and collateral. Profit, liquidity and gross margins have no role in affecting the decision of trade credit granting to customers. The results are inconsistent with previous studies. Size and short-term finance have a negative, rather than positive, impact. Liquidity and gross margins have no, rather than positive, effect. While profit and sales growth are predicted to feature a U-shaped relationship with investment in AR, the former is insignificant while the latter is strictly increasing. The only factor found to be consistent with prior studies is collateral. Research limitations/implications The results have two principal implications. First, policy makers should not take a holistic view of the trade credit market. Given that policy makers aim to improve liquidity and trade, they should design policies that are not only country specific but also sector specific. As is clear from our results, what holds for other countries or sectors may not necessarily be true for the Malaysian manufacturing sector. This has important implications for policy makers in emerging economies. Practical implications Investment in AR, in the Malaysian manufacturing sector, is impacted by many of the factors implied by either theory or empirical evidence. However, the main finding in this paper is that the Malaysian manufacturing sector is rather different. First, while liquidity and gross margin have been found to have a positive and significant effect on AR helping hand theory in prior studies, the results show that these two factors play no role in influencing the level of AR in the Malaysian manufacturing sector. Social implications Unlike the experience in developed economies, firms in our sample that have access to short-term finance are less likely to grant trade credit. This suggests that the helping hand theory does not hold as far as the Malaysian manufacturing firms are concerned: firm that have better access to short-term finance in Malaysia do not use trade credit to pass on the benefit to their customers by granting them trade credit. Originality/value It is unclear why firms invest in AR given the high risks of uncollectability as well as tedious, time-consuming and costly legal process for debt recovery compared to firms from more developed economies. This paper examines the reasons business-to-business lending, through AR, is widespread in Malaysia and investigates the factors that affect this decision despite the risk involved. To our knowledge, this is the first study to date that looks at the factors that influence AR level in the Malaysian manufacturing sector.

This chapter analyses the relationship between related party transactions (RPT) and firm value and whether independent directors' tenure (IDT) strengthens or weakens this relationship. Further, it examines ownership concentration's role on this moderating effect of IDT in Malaysian family and non-family corporations. It is found that that IDT weakens the relationship between RPT and firm value. However, ownership concentration strengthens this moderating effect of IDT. Interestingly, family corporations are more likely to show a stronger impact of ownership concentration which we allude to concerns of maintaining reputation. The research results remain after controlling for technology corporations. The findings' have important implications for policy makers, practitioners and regulators, especially in emerging economies globally.Keywords: Agency Conflict, Corporate Financial Valuation, Independent Directors' Term in the Office, Corporate Governance, Family Corporations, Emerging Markets

This paper examines whether late payment (LP) by customers impacts firms' profitability, using a cross-sectional sample of 287 Malaysian public-listed manufacturing firms for the financial year 2007. This is an important issue given that trade credit is commonly seen as a significant short-term financing practice in Asia. However, in Malaysia, trade credit has not been explored, largely due to the unavailability of relevant published data and the reluctance of firms to divulge information regarding their trade credit practices. To overcome this, we suggest a new measure of LP using the Pareto 80:20 rule to take cognisance of local nuances and industry practice, and argue that Pareto Days Overdue is an appropriate measure of LP for Malaysia. We find that 60% of the sampled firms experience LP and LP has a significant inverse effect on their profitability; and those with shorter credit terms and Days Sales Outstanding (DSO) perform better than those with longer credit terms and longer DSO. The paper also discusses implications for policy makers and regulators since the accounting rules related to the disclosure of receivables in Malaysia are converging towards the International Financial Reporting Standards (IFRS).

The role of small and medium enterprises (SMEs) is recognized globally given their contribution to total productivity and job opportunities. However, the majority of SMEs tend to fail due to a lack of marketing knowledge and managerial skills or technical expertise. Professional accountants are in a unique situation to help SME owner/managers to achieve their business objectives and bridge the skills gap. Therefore, this paper aims to identify the factors that affect the decisions of owner/managers of SMEs in Iranian manufacturing sector to utilise the professional accountants’ advisory services and to examine the impact of these advisory services on SME performance using the Resource-Based View (RBV) of the firm. Based on a questionnaire survey data of 658 Iranian manufacturing SMEs, our regression analysis reveals a significant positive relationship between utilisation of professional accountants′ advisory services and three independent variables, namely, knowledge of owner/manager, competitive intensity and complexity of marketing decisions. Furthermore, we evidence that the use of advisory services is significant and positively associated with SME performance. More importantly, utilisation of professional accountants′ advisory services partially mediates the relationship between knowledge of owner/manager, competitive intensity and complexity of marketing decisions and firm performance. Therefore, we provide a specific, theoretically and empirically grounded prediction of how utilisation of professional accountants′ advisory services influences performance with implications for theory and practice.

This study aims to identify the factors affect Iranian SME decision to outsource accounting functions in term of transaction cost economics (TCE) and resource- based view (RBV) perspectives in manufacturing sector. Data collected by using a 658 questionnaire survey with SME owner/ managers. Our multiple linear regression analysis shows that higher asset specificity was associated with lower levels of outsourcing of accounting functions. In addition, outsourcing intensity is positively and significantly related to trust in external accountant, degree of competition, and corporate strategy. Besides, when we included control variables such as firm size and firm age, education and experience in our regression equation, the association between outsourcing intensity and four independent variables was remained statistically significant.

Purpose – The relationship between the board characteristics (i.e. board independence, CEO duality, board size, board meeting and board tenure) and the ownership structure (i.e. managerial ownership, family ownership and institutional ownership) and earnings quality is examined. Design/methodology/approach – Data from 280 non-financial companies listed on Bursa Malaysia's Main Board for the year 2004 is used. Findings – Significant association was found between board tenure and earnings quality. In addition, a positive significant association was found between outside board ownership and family ownership and earnings quality. However no significant relationship was found between board of directors’ independence and earnings quality. Research limitations/implications – The association between audit committees’ characteristics and earnings quality was not examined. An examination of the impact of ownership structure on boards of directors and audit committees is warranted. An investigation of the impact of the ownership structure on earnings quality in Malaysia using separate test on family-controlled and non-family-controlled firms is suggested. Practical implications – The appropriateness of policy directives requiring majority independent directors may be considered by policy makers. Originality/value – The conflict of interest between outside shareholders and managers in a diffused ownership support the agency theory. However, utility of agency theory to explain the conflicts between the controlling owners and the minority shareholders where ownership concentration is prevalent is limited. Whilst demonstrating the dominant impact of ownership structure on earnings quality in Malaysia the study calls for alternative explanations of corporate governance practices in different institutional settings.