| Summary: | Purpose – The purpose of this paper is to provide an exploration on how important are “other
block-holders” in explaining the performance of family-controlled corporations in Malaysia. Three
important groups of block-holders are identified for the purpose, namely the “foreign institutional
investors”, the “domestic institutional investors” and the “government”.
Design/methodology/approach – The sample was drawn based on the companies listed on the
Main Board of Bursa Malaysia. All the relevant block-holders’ ownership data are hand-collected
from the annual reports published by the listed corporations and descriptive statistics together with
regression analysis are employed.
Findings – Overall it is found that the presence of a second block-holder in family-controlled
corporations leads to better performance compared to the corporations where the controlling families
act as the sole block-holder. Moreover, this study finds that the identity of the block-holders with the
extent of their ownership is important in explaining the performance. Specifically, “foreign institutional
investors” and “government” are found to be significant in terms of the extent of their equity holdings
and the performance of these corporations, respectively. Conversely, no such relationship is found in
the equity holdings of “domestic institutional investors” and the corporation performance. Such finding
may imply the possible limited ability and constraints faced by the “domestic institutional investors” in
Malaysia to exert effective monitoring and pressure on the management for enhanced corporation
performance.
Originality/value – Many studies researched the influence of family ownership on the performance
of family-controlled corporations but there are limited studies conducted on the influence of “other
block-holders” in affecting the performance of these corporations. This paper is an attempt to provide
an initial exploration on how important are these “other block-holders” in explaining the performance
of these corporations in the context of a small emerging economy, Malaysia.
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