Blockholders and corporate monitoring costs: evidence from Malaysia
This paper examines the effect of outside block-holders’ ownership on the demand for corporate monitoring in relation to agency theory in the Malaysian business environment. The results of this study provide evidence that, given the cultural differences, the agents and the principals may act differ...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics and Management, Universiti Putra Malaysia
2013
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| Online Access: | http://psasir.upm.edu.my/id/eprint/30855/ http://psasir.upm.edu.my/id/eprint/30855/1/Blockholders%20and%20Corporate%20Monitoring%20Costs.pdf |
| _version_ | 1848846796661456896 |
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| author | Mustapha, Mazlina Che Ahmad, Ayoib |
| author_facet | Mustapha, Mazlina Che Ahmad, Ayoib |
| author_sort | Mustapha, Mazlina |
| building | UPM Institutional Repository |
| collection | Online Access |
| description | This paper examines the effect of outside block-holders’ ownership on the demand for corporate monitoring in relation to agency theory in the Malaysian business environment. The results of this study provide evidence that, given the cultural differences, the agents and
the principals may act differently. The findings indicate that blockholders in Malaysia appear to demand more monitoring costs as their shareholdings increase. This positive relationship may be associated with the demand for more monitoring by minority shareholders as a balance against the power of the majority shareholders in the
concentrated business environment in Malaysia and the tighten regulations after 1997/98 financial crisis. Further investigation shows that the institutional and non-institutional block-holders react and demand different level of monitoring costs. The institutional blockholders
who are mostly government related institutions appear to
demand more monitoring costs as their share ownership increase, while the non-institutional shareholders are associated with less monitoring costs as their shares increase. |
| first_indexed | 2025-11-15T09:08:24Z |
| format | Article |
| id | upm-30855 |
| institution | Universiti Putra Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T09:08:24Z |
| publishDate | 2013 |
| publisher | Faculty of Economics and Management, Universiti Putra Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | upm-308552015-07-03T07:50:19Z http://psasir.upm.edu.my/id/eprint/30855/ Blockholders and corporate monitoring costs: evidence from Malaysia Mustapha, Mazlina Che Ahmad, Ayoib This paper examines the effect of outside block-holders’ ownership on the demand for corporate monitoring in relation to agency theory in the Malaysian business environment. The results of this study provide evidence that, given the cultural differences, the agents and the principals may act differently. The findings indicate that blockholders in Malaysia appear to demand more monitoring costs as their shareholdings increase. This positive relationship may be associated with the demand for more monitoring by minority shareholders as a balance against the power of the majority shareholders in the concentrated business environment in Malaysia and the tighten regulations after 1997/98 financial crisis. Further investigation shows that the institutional and non-institutional block-holders react and demand different level of monitoring costs. The institutional blockholders who are mostly government related institutions appear to demand more monitoring costs as their share ownership increase, while the non-institutional shareholders are associated with less monitoring costs as their shares increase. Faculty of Economics and Management, Universiti Putra Malaysia 2013-06 Article PeerReviewed application/pdf en http://psasir.upm.edu.my/id/eprint/30855/1/Blockholders%20and%20Corporate%20Monitoring%20Costs.pdf Mustapha, Mazlina and Che Ahmad, Ayoib (2013) Blockholders and corporate monitoring costs: evidence from Malaysia. International Journal of Economics and Management, 7 (1). pp. 28-44. ISSN 1823-836X http://econ.upm.edu.my/ijem/vol7_no1.htm |
| spellingShingle | Mustapha, Mazlina Che Ahmad, Ayoib Blockholders and corporate monitoring costs: evidence from Malaysia |
| title | Blockholders and corporate monitoring costs: evidence from Malaysia |
| title_full | Blockholders and corporate monitoring costs: evidence from Malaysia |
| title_fullStr | Blockholders and corporate monitoring costs: evidence from Malaysia |
| title_full_unstemmed | Blockholders and corporate monitoring costs: evidence from Malaysia |
| title_short | Blockholders and corporate monitoring costs: evidence from Malaysia |
| title_sort | blockholders and corporate monitoring costs: evidence from malaysia |
| url | http://psasir.upm.edu.my/id/eprint/30855/ http://psasir.upm.edu.my/id/eprint/30855/ http://psasir.upm.edu.my/id/eprint/30855/1/Blockholders%20and%20Corporate%20Monitoring%20Costs.pdf |