The Impact of Corporate Governance on Firm Performance During The COVID-19 Pandemic: Evidence from Malaysia

Journal of Asian Finance, Economics and Business, 8(2), 0943–0952

14 Pages Posted: 13 Jan 2021 Last revised: 28 Aug 2021

See all articles by Saleh F. A. Khatib

Saleh F. A. Khatib

Universiti Teknologi Malaysia

Abdul-Naser Ibrahim Nour

An-Najah National University

Date Written: 2021

Abstract

The purpose of this study is to evaluate the effect of COVID-19 on corporate governance attributes and firm performance association. This research used a sample of 188 non-financial firms from the Malaysian market for the years 2019-2020. We found that the COVID-19 has affected all firm characteristics including firm performance, governance structure, dividend, liquidity, and leverage level, yet, the difference between prior and post COVID-19 pandemic is not significant. Also, the investigation revealed that board size exerts a significant positive impact on firm performance. After splitting the sample based on year, however, we found that board size does not matter in the uncertain time of the current crisis, while board diversity appeared to be significantly enhancing firm performance in the crisis time compared to the prior year where it has an inverse association with firm performance in both indicators. Board meetings and audit committee meetings seemed to have a significant negative influence on firm performance pre and post-COVID-19. This study contributes to the limited literature by providing the first empirical evidence on the impact of Coronavirus on the firm performance and corporate governance association.

Keywords: Malaysia, COVID-19, Corporate Governance, Firm Performance, Audit Committee

JEL Classification: G0, G3

Suggested Citation

Khatib, Saleh F. A. and Nour, Abdul-Naser Ibrahim, The Impact of Corporate Governance on Firm Performance During The COVID-19 Pandemic: Evidence from Malaysia (2021). Journal of Asian Finance, Economics and Business, 8(2), 0943–0952, Available at SSRN: https://ssrn.com/abstract=3762393

Saleh F. A. Khatib (Contact Author)

Universiti Teknologi Malaysia ( email )

Azman Hashim International Business School
Block T08, Universiti Teknologi Malaysia
Skudai, Johor 81310
Malaysia
81310 (Fax)

HOME PAGE: http://https://business.utm.my/

Abdul-Naser Ibrahim Nour

An-Najah National University ( email )

Nablus
Palestine
Nablus, PA 00972
Palestine

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