Corporate Ownership, Corporate Governance Reform and Timeliness of Earnings: Malaysian Evidence

Journal of Contemporary Accounting & Economics, Forthcoming

FIRN Research Paper

Posted: 2 Oct 2013 Last revised: 30 Oct 2013

See all articles by Mable S. H. Lim

Mable S. H. Lim

Queensland University of Technology

Janice C. Y. How

Queensland University of Technology; Financial Research Network (FIRN)

Peter Verhoeven

Queensland University of Technology - QUT Business School; Financial Research Network (FIRN)

Date Written: October 2, 2013

Abstract

This paper provides the first evidence showing that ownership concentration and the identity of the largest shareholder matter to the timeliness of corporate earnings, measured by a stock price-based timeliness metric and the reporting lag. Using panel data of 1,276 Malaysian firms from 1996 to 2009, we find a non-linear relationship between concentrated ownership, measured by the largest shareholding in a firm, and the reporting lag but not the timeliness of price discovery. Although firms with government as the largest shareholder and political connections have a significantly shorter reporting lag, only the former are timelier in price discovery. Firms with family and foreigners as the largest shareholder however are less timely in price discovery. While the reporting lag is shorter in the period after the integration of the Malaysian Code of Corporate Governance (MCCG) into Bursa listing rules, its impact on the timeliness of price discovery is mostly immaterial.

Keywords: Timeliness, Price Discovery, Corporate Governance, Ownership

JEL Classification: G30, G34, G38

Suggested Citation

Lim, Soon Hong and How, Janice C. Y. and Verhoeven, Peter, Corporate Ownership, Corporate Governance Reform and Timeliness of Earnings: Malaysian Evidence (October 2, 2013). Journal of Contemporary Accounting & Economics, Forthcoming; FIRN Research Paper. Available at SSRN: https://ssrn.com/abstract=2334643

Soon Hong Lim (Contact Author)

Queensland University of Technology ( email )

2 George Street
Brisbane, Queensland 4000
Australia

Janice C. Y. How

Queensland University of Technology ( email )

2 George Street
Brisbane, Queensland 4000
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

Peter Verhoeven

Queensland University of Technology - QUT Business School ( email )

GPO Box 2434
Brisbane, Queensland 4001
Australia

Financial Research Network (FIRN)

C/- University of Queensland Business School
St Lucia, 4071 Brisbane
Queensland
Australia

HOME PAGE: http://www.firn.org.au

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