دانلود رایگان مقاله انگلیسی قدرت حاکمیت شرکتی و نقدینگی بازار بورس در کشور مالزی - امرالد 2017

Abstract

Purpose – The purpose of this paper is to examine the impact of corporate governance strength on stock market liquidity in an emerging country, namely, Malaysia, by constructing a corporate governance score that captures both internal monitoring mechanisms (board of directors’ characteristics, audit committee’s characteristics and internal audit function) and external monitoring mechanism (audit quality). Design/methodology/approach – The study uses a sample of 2,020 yearly firm observations in Bursa Malaysia over the period 2009-2012. The ordinary least square regression and several estimation methods such as two-stage least squares using instrumental variables (IV-2SLS) and dynamic GMM are employed. Findings – This study finds a significant positive association between corporate governance effectiveness and stock market liquidity. The finding is robust to alternative liquidity measurements, to alternative estimation methods, and to endogeneity bias. Research limitations/implications – This result implies that the firms with effective monitoring mechanisms mitigate information asymmetry which leads to less adverse selection problems among traders. Practical implications – This study provides implications for regulators to help design regulations that enhance stock market liquidity. This study could also help investors and traders to formulate their trading decisions, and enables firms to know the importance of strengthening the corporate governance monitoring mechanisms. Originality/value – This study constructs a corporate governance effectiveness measure by combining both internal and external monitoring mechanisms. These mechanisms have not been constructed together in one score in the corporate governance literature and the impact of internal audit function, as an internal monitoring mechanism on liquidity, has yet to be examined.

Summary

It is widely argued that stock liquidity might be affected by the corporate governance. As firms with effective corporate governance mechanisms compel more monitoring on managers and prevent them to do any concealing or distorting for the information. Hence, information asymmetry might be mitigated which lead to less adverse selection problems among traders. Thus far, internal audit function as an internal monitoring mechanism is yet to be examined jointly with other corporate governance monitoring mechanisms on stock market liquidity. The study examines the impact of corporate governance strength on stock market liquidity by constructing a score that capture the internal and external monitoring mechanisms. The results show that there is a significant positive relationship between corporate governance score and stock market liquidity. This means that firms with effective internal and external monitoring mechanisms have better stock liquidity. This implies that maintaining good corporate governance mechanisms is beneficial for firms in terms of their stock liquidity. The findings of this study provide implications to improve capital market in emerging economies where regulators who enhance internal and external monitoring mechanisms are the norm. Regulators should consider corporate governance reforms to improve stock market liquidity by mandating initiating IAF, such an internal monitoring mechanism might be beneficial to enhance emerging markets financial market where ownership is highly concentrated and protection for minor shareholders is weak. This study also gives implications to the investors to devise their trading strategies through considering corporate governance mechanisms closely. In term of the managerial implications, based on the findings investors might react positively to the corporate governance strength. As a result, firm can enhance its liquidity by increasing the insurance of investors. The corporate governance may be strengthened by the presence of an effective board of directors, audit committee, internal audit function and audit quality. Consequently, in a country like Malaysia, firms experience higher market liquidity in the presence of effective corporate governance mechanisms