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The Value Relevance of Transparency and Corporate Governance in Malaysia Before and After the Asian Financial Crisis
Author(s) -
MORRIS RICHARD D.,
PHAM TAM,
GRAY SIDNEY J.
Publication year - 2011
Publication title -
abacus
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.632
H-Index - 45
eISSN - 1467-6281
pISSN - 0001-3072
DOI - 10.1111/j.1467-6281.2011.00339.x
Subject(s) - corporate governance , stock exchange , transparency (behavior) , accounting , business , financial crisis , kuala lumpur , relevance (law) , financial system , value (mathematics) , sample (material) , finance , economics , political science , marketing , machine learning , computer science , law , macroeconomics , chemistry , chromatography
This paper investigates whether the value relevance of financial reporting transparency and corporate governance in Malaysia increased after the Asian financial crisis of 1997. Our sample comprised 94 companies listed on the Kuala Lumpur Stock Exchange in both 1996 and 2001. The disclosure indexes were significantly value relevant for 2001 but not for 1996. Our corporate governance measure was also significantly value relevant for 2001 but not for 1996. Accordingly, it would appear that after the Asian financial crisis, investors have become more sensitized to transparency and corporate governance issues.