Institutional Investors and Director Remuneration: Do Political Connections Matter?
Effiezal Aswadi Abdul Wahab
Curtin University of Technology - School of Accounting
Rashidah Abdul Rahman
Universiti Teknologi MARA (UiTM) - Bureau of Research and Consultancy (BRC)
Advances in Financial Economics, Vol. 13, 2009
This study examines the relationship between institutional investors and director remuneration in Malaysia against an important institutional backdrop of political connections. Our panel analysis of 434 firms from 1999 to 2003 finds a negative relationship between institutional ownership and director remuneration suggesting the effectiveness of institutional monitoring. Although we find no evidence to suggest a politically-determined remuneration scheme, the negative relationship between institutional ownership and remuneration becomes less in politically-connected firms. This suggests that political connections mitigate institutional monitoring in relationship-based economies.
Number of Pages in PDF File: 42
Keywords: Institutional Investors, Director Remuneration, Political Connection
JEL Classification: G21, G22, G23, J33, P48Accepted Paper Series
Date posted: October 26, 2011
© 2013 Social Science Electronic Publishing, Inc. All Rights Reserved.
This page was processed by apollo1 in 0.422 seconds