The relationship between environmental disclosures and financial performance of public listed companies in Malaysia

Nowadays, corporations are facing the challenges of publishing environmental disclosures as the public concerns on the environmental issues have increased. A controversial issue is whether firms with environmental disclosures will result in a better financial performance since, there is an increasing trend for large companies chooses to make environmental disclosures voluntarily. This study aims to examine the relationship between environmental disclosures and financial performance of public listed companies in Malaysia. Content analysis approach was adopted to determine the quantity and quality of the environmental disclosure in the annual reports of 100 companies listed on the Main Board of Bursa Saham Malaysia for the year 2009 until 2013. The results show that only the quality of environmental disclosure has the positive relationship with the company’s Earnings per Share (EPS). This study also indicates that larger companies disseminated more environmental information as well as provided better quality disclosure. Interestingly, the results of this study indicated that less environmentally sensitive industries disclosed more and higher quality of environmental disclosure than environmentally sensitive industries. In conclusion, the environmental disclosures practices in Malaysia is still in an adaptation stage as many Malaysia companies still do not disclose any environmental information in their annual reports. Hence, more effective efforts are needed from regulatory bodies to increase the environmental awareness in Malaysia

The relationship between environmental disclosures and financial performance of public listed companies in Malaysia

Nowadays, corporations are facing the challenges of publishing environmental disclosures as the public concerns on the environmental issues have increased. A controversial issue is whether firms with environmental disclosures will result in a better financial performance since, there is an increasing trend for large companies chooses to make environmental disclosures voluntarily. This study aims to examine the relationship between environmental disclosures and financial performance of public listed companies in Malaysia. Content analysis approach was adopted to determine the quantity and quality of the environmental disclosure in the annual reports of 100 companies listed on the Main Board of Bursa Saham Malaysia for the year 2009 until 2013. The results show that only the quality of environmental disclosure has the positive relationship with the company’s Earnings per Share (EPS). This study also indicates that larger companies disseminated more environmental information as well as provided better quality disclosure. Interestingly, the results of this study indicated that less environmentally sensitive industries disclosed more and higher quality of environmental disclosure than environmentally sensitive industries. In conclusion, the environmental disclosures practices in Malaysia is still in an adaptation stage as many Malaysia companies still do not disclose any environmental information in their annual reports. Hence, more effective efforts are needed from regulatory bodies to increase the environmental awareness in Malaysia

Investor Sentiment Integrated Asset Pricing Framework: The Case Of Malaysia

This study addresses the issues pertaining to asset pricing in Malaysian stock market using monthly data for all the stocks on the main market of Bursa Malaysia, macroeconomic variables and sentiment proxies over the period of January 2001 to December 2015. The study is carried out based on two theoretical foundations: the efficient market hypothesis and behavioural finance. The research commences with testing of the traditional asset pricing models. First, the three-factor Fama-French model is studied, using Autoregressive Distributed Lag (ARDL) approach to examine the long-run co-movements and shortrun dynamics between stock excess returns and three risk factors of Fama and French. Although the model fits the data reasonably well with all the significant and expected positive signs of the coefficients of Fama-French three risk factors, it is likely to be mis-specified as is evident by the Ramsey RESETs mis-specification test. Next, the research continues to investigate whether the model can be improved by adding in another four macroeconomic and money market risk factors in the multi-beta asset pricing model. Albeit the three fundamental risk factors of Fama-French remain significant and relevant, the inclusion of the four macroeconomic and money market risk factors could hardly contribute to the explanations of asset pricing in the long run. Only exchange rate and inflation displayed short-run dynamics with the stock excess return during the period of study. Indeed, the macroeconomic and money market factors provide little help to the asset pricing model in Bursa Malaysia

The dynamic relationships between cash and futures market: the Malaysian experience under a shift from flexible to fixed exchange regimes

The purpose of this study is to examine the dynamic relationships between the Kuala Lumpur Stock Exchange Composite Index (KLSE CI) (currently known as FTSE Bursa Malaysia KLCI) and the Kuala Lumpur Stock Exchange Composite Index Futures (KLSE CI Futures), spot month futures contract under a shift from flexible to fixed exchange regimes. The VAR model of Johansen-Juselius multivariate cointegration test, multivariate Granger-Causality test are applied to capture the dynamic linkages between KLSE CI and KLSE CI Futures in the periods of pre- and during the Asian currency crisis under flexible exchange regime and after the crisis fixed exchange regime. The empirical results of this study display that the KLSE CI and KLSE CI Futures are cointegrated and there is long run causality between KLSE CI and KLSE CI Futures in the three sub-sample periods. In the short run, there are evidences of contemporaneous causality running between the variables. The result exhibits that only the KLSE CI does "Granger" causes the KLSE CI Futures in the first sub-sample period. In the second sub-sample period, the KLSE CI Futures "Granger" causes the KLSE CI. In the third sub-sample period, the result displays that the KLSE CI "Granger" causes the KLSE CI Futures. As a conclusion, this study shows that the KLSE CI Futures leads the KLSE CI, especially during the crisis under flexible exchange regime, which implies that KLSE CI Futures has some predictive power for the KLSE CI

The optimal government size and economic growth: A comparative study between Malaysia and South Korea

Inspired by the Look East Policy, Malaysia aims to learn from such a successful Asian country as South Korea in order to break through its upper-middle-income trap. Using the dynamic threshold nonlinear approach, this comparative study is therefore timely to compare and contrast the nonlinear correlation between economic growth and government spending between these two nations. When considering two different measures of government size as the threshold variable, namely government operating/real GDP (GS1) and government investment/real GDP (GS2), the practical findings of this research indicate the presence of a threshold effect between government size and economic growth in the contexts of Malaysia and South Korea. Specifically, the BARS curve exists in Malaysia and South Korea when GS1 is set as the threshold variable. However, a U-shaped curve of nonlinear relationship exists in both countries when GS2 serves as the threshold variable. Interestingly, the threshold two-regime regression results show that while government operating expenditures in both Malaysia and South Korea are not found to be overspent and are beneficial for economic growth, the Malaysian government's investment expenditure has not achieved the full potential of accelerating economic growth compared to South Korea

The Nexus of Capital Flows, Real Interest Rate and Stock Price Performance: Evidence from Malaysia

The stock market is widely known as an essential market in fostering capital formation to sustain economic growth. Higher levels of internationalisation of the stock market will lead to a positive economic growth in the country. The growth of stock market is of vital importance to Malaysia, an emerging economy, in the process of transforming its economic structure into a high-income-and-high-growth economy and thus realising its Vision 2020 of becoming a developed nation. Using VAR model of Johansen-Juselius multivariate cointegration procedures and multivariate Granger-Causality test, this paper examines both short-run dynamic and long-run relationship between the capital flows, both short term and long term, and stock performance in the presence of changes in real interest rate in Malaysia. Our empirical result denotes that there is a negative relationship between stock price and real interest rate in the long run. Besides, it is also found that the stock price is positively related to the net portfolio investment and private long-term investment. There is strong evidence of a bi-directional short-run causality between stock price and real interest rate as well as real interest rate and portfolio investment flows in Malaysia. This suggests that the stability in the stock market is closely linked to the interest rate stability. The fluctuation in real interest rate creates uncertainty for investors and hence affecting the capital flows into Malaysia and investors’ decision making in Malaysian stock market. It is therefore recommended that a forward-looking monetary policy is the necessity for economic stability as well as strengthening the functionality of stock market, which is fundamental for a country to reach high growth and high income by Year 2020

Assessing the Framework of Government Expenditure and Economic Wellbeing: A Comparison Study Between Malaysia, Japan, and South Korea

Background - Government expenditure is presumed to has a positive outcome toward the economy. However, recent studies indicate that too large of government size has the effect of slowing down economic growth. Recent research also indicate that different component of government expenditure has a different effect on economic well-being in the long run. Purpose - This study aims to find the optimal sizes of government expenditure that maximise the economic growth including government operating expenditure and investment expenditure. Design/methodology/approach - This research sits on the positivistic research paradigm and used quantitative approach to close the gap in the research problem. The research is based on the Armey curve which indicate that economic growth and government size has a nonlinear relationship and optimal government size can be achieved. The optimal sizes can be achieved using Ram’s (1986) model and extending the model with Threshold Autoregressive (TAR) model that introduced by Hansen (2000). The research used the data on economic growth, labour force growth, investment rate, government size, and trade openness to find the optimal government size. This research analyses the data from 2000 quarter 1 to 2019 quarter 4 for Malaysia, Japan, and South Korea. Findings/Expected Contributions - The research contributes to the literature by inclusion of international trade into enhanced threshold model of Chen and Lee (2005). The study also may provide the policymakers in-depth understanding the long-term influence of government size toward economic growth in Malaysia. Research limitations - The research is limited to the amount of data available for Malaysia and thus limiting the number of observations of Japan and South Korea Originality/value - This research is done to find the optimal point where the government has the most externalities toward economic growth directly or indirectly through the private secto

Nonlinear threshold approach for asymmetric effects of government size on economic growth in an emerging Asian economy: the Malaysian experience

This paper discovers the asymmetric relation between government size and economic growth in Malaysia, an emerging Asian economy, by utilising a dynamic threshold nonlinear approach. The study finds empiric evidence that the threshold effect linking government size to economic growth in Malaysia exists when two different proxies of government size are set as the threshold variable. On closer inspection, it is found that an inverted U-shaped Armey curve is present when allowing for endogenous government size threshold proxied by government operating/real GDP. However, a U-shaped curve of nonlinear relationship exists instead when the government investment/real GDP serves as the threshold variable. In general, this paper gives policymakers a real insight into the optimal government size in Malaysia especially when designing an effectual fiscal policy to advance sustainable economic growth to materialise its Shared Prosperity Vision by the year 2030

The nexus of female labour force participation, economic growth, education and fertility rate: empirical evidence in Malaysia

Malaysia, a fast-growing developing country in Asia, has envisioned Shared Prosperity Vision 2030 to become a developed economy with highincome via sustainable and inclusive economic growth by the year 2030. To accomplish this vision, femalelabour participation isneeded as the femalepopulation constitutesalmost half of Malaysia’s total population. However, female labour participation rate iswaylower than Malaysia’s overall labour force participation rate.The relatively low female labour participation rate can be a barrier to Malaysia’s economic development and thus the realization of its goal of a high income nation.Therefore, this paper makes an attempt to examine empirically the long-run causal association amongfemale labour force participation, economic growth, education, and fertility rate. The interrelationships among the variables are examined using the bounds test and Toda-Yamamoto granger non-causality methodology. The result of the study indicates a strong evidence of long-run relationship among the variables. Besides, we have found asignificant inverted-U-shaped associationlinking the female labour force participationto the economic growthin Malaysia. The results of Granger causality tests further confirm that there is a strong evidence of bidirectional causality from education to economic growth as well as female labour participation. Besides, the results also show significant unidirectional causality from female labour force participation and fertility to economic growth