Evaluation of the factors affecting corporate performance of Malaysian listed companies.

Mokhtar, Mohd Zulkifli. 2006. Evaluation of the factors affecting corporate performance of Malaysian listed companies. PhD Thesis, Cardiff University.

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Abstract

This study investigated internal factors, including company's size, age, growth, capital structure and ISO 9000 registration, and an external factor, the category of industry, which impact corporate performance in a sample of Malaysian companies. To achieve this objective, the annual reports of 162 companies were collected and an seven-factor corporate performance evaluation model was tested based on the hypotheses created. The study has utilised seven different measures of company performance: Return on Assets (ROA), Return on Equity (ROE), Working Capital (WC), Return on Sales (ROS), Cash Flow (CF), Economic Value Added (EVA) and Tobin's Q (TQ) ratio, to act as dependent variables in order to examine their relationships with company's size, age, growth, capital structure, ISO 9000 registration and category of industry. This study found that the significant dependent variables that determined Malaysian corporate success were ISO 9000, capital structure, company size and category of industry. On establishing the relationship between ISO 9000 registration and the seven financial performance measures, ROA, EVA, ROS and WC appeared to have significant positive associations with ISO 9000 registration. On establishing the relationship between ISO 9000 registration and the financial performance of Malaysian companies, this study reveals that ISO 9000 registered companies in Malaysia outperformed their non-ISO 9000 registered counterparts in terms of ROA, ROE, WC, ROS, CF, EVA and TQ during the period of this study. Thus, this study lends support to some of the findings reported in Haversjo (2000), Heras et al. (2002) and Corbett et al. (2002) regarding the impact of ISO 9000 registration on company performance. ISO registered companies were also found to be younger than their counterparts, and they also tended to be larger in size, based on total assets. The growth of ISO companies was better than that of non-ISO registered companies and their capital structure was much less than their counterparts. In addition, company's capital structure was found to be another influential factor in determining Malaysian corporate success. On establishing the relationship between capital structure and the seven company financial performance measures, ROA, ROS and WC were found to have significant negative associations with capital structure. Another factor that was found to determine Malaysian corporate success was company size. This was based on the relationship established between company's size and the seven financial performance measures, wherein CF was found to have a significantly positive association with company size. Category of industry was also found to determine Malaysian corporate success. This was based on the relationship established between category of industry and the seven financial performance measures. With regard to the Pearson's correlation analysis, this study found that CF values rise with an increase in the size of the corporation they also increase with growth rates. This would suggest that larger firms experiencing high growth rates would tend to have high CF. This supports earlier work that found that organizational attributes were associated with more positive cash flows (Brush and Van der Werf 1992; Cooper 1993; Brush and Chaganti 1999). This study also conducted a questionnaire survey in order to assess the impact of ISO 9000 accreditation on non-financial performance measures. Among the findings, ISO 9000 registered companies performed better than non-ISO 9000 registered companies in terms of managing information and analysis factors, strategic quality planning factors, human resource development and management factors, management of process quality factors, and comparative business outcome factors.

Item Type:	Thesis (PhD)
Status:	Unpublished
Schools:	Business (Including Economics)
Subjects:	H Social Sciences > HF Commerce
ISBN:	9781303174346
Funders:	Malaysian government and College University Science and Technology Malaysia (KUSTEM) Terengganu
Date of First Compliant Deposit:	30 March 2016
Last Modified:	12 Feb 2016 23:11
URI:	https://orca.cardiff.ac.uk/id/eprint/54284

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