Ownership Structure and Intellectual Capital Performance in Malaysia
Asian Academy of Management Journal of Accounting and Finance, Vol. 5, No. 1, pp. 1-29, 2009
29 Pages Posted: 1 Jul 2008 Last revised: 3 Jun 2010
Date Written: September 1, 2009
The performance of intellectual capital (IC) depends on the efficiency of investments in tangible and intangible resources devoted to value creation activities. The performance of IC investments is important because it affects a company's long term competitive advantage. This paper examines whether ownership structure (whether it is management, foreign, government or family ownership) can explain the variation in a company's IC performance. It provides additional insight into the role and incentives of firm owners and could affect the company's ability to increase value (value creation activities). This research relies on an empirical model using VAICTM to measure IC performance. The data consists of all companies listed on the Malaysian Exchange of Securities Dealing and Automated Quotation Market (MESDAQ) market in between 2005 and 2007. Family ownership appears to have a negative effect on IC performance. A high degree of family ownership implies a high probability of opportunistic behaviour among families pursuing their objectives at the expense of value creation activities. The results are valuable for capital market regulators in monitoring the efficiency of value creation investments.
Keywords: Foreign ownership, government ownership, management ownership, intellectual capital performance, Malaysia
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