Dynamic capital structure and political patronage: The case of Malaysia

Abstract

(2014) 'Dynamic capital structure and political patronage : the case of Malaysia.', International review of nancial analysis., 31 . pp. 117-128. Further information on publisher's website:http://dx.doi.org/10.1016/j.irfa.2013.11.004Publisher's copyright statement: NOTICE: this is the author's version of a work that was accepted for publication in International Review of Financial Analysis. Changes resulting from the publishing process, such as peer review, editing, corrections, structural formatting, and other quality control mechanisms may not be reected in this document. Changes may have been made to this work since it was submitted for publication. A denitive version was subsequently published in International Review of Financial Analysis, 31, January 2014, 10.1016/j.irfa.2013.11.004. Additional information:Use policyThe full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that:• a full bibliographic reference is made to the original source • a link is made to the metadata record in DRO • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders.Please consult the full DRO policy for further details.

Dispelling the myth of a value premium: contrary evidence of Malaysian crony capitalism

“…Our results make sense in the context of Malaysia's economic structure, where most of the big and successful firms are either state owned or politically connected. This is due to the fact that these firms have special privileges to capture government-created rents through privatisation, licences or contracts (see Ebrahim et al, 2014b). For instance, Renong Bhd, a company with a direct link to the ruling party, emerged as one of Malaysia's largest conglomerates (see Gomez, 1994).…”

“…Fraser et al (2006) find that larger and more profitable Malaysian firms with political patronage carry more leverage than firms with less political patronage. Ebrahim et al (2014b) investigate this issue further to illustrate that the government support of connected firms has waned after the Asian crisis. This has led to a convergence between politically connected firms and unconnected firms.…”

“…This has led to a convergence between politically connected firms and unconnected firms. We go beyond Ebrahim et al (2014b), segregate the growth firms from their value counterparts to illustrate the preferential treatment of politically connected growth firms over that of value ones especially during economic downturns in Section 3.…”

“…A secondary goal is to advance an 'economic driver' of the value premium. The counter-example selected in our case is that of the crony capitalism of Malaysia (see Ebrahim et al, 2014b). This has attributes that are particularly helpful in gaining a different perspective on the value premium debate.…”

Indonesia After Joko Widodo: The Increase in Politics and Public Administration

“…To find a solution that occurs in regionalism, it involves the participation of various countries. Regional economic growth can be supported with economic transactions at a global level that was done by the member countries of the organization (Ebrahim, Girma, Shah, & Williams, 2014;Shahzad, Raza, Balcilar, Ali, & Shahbaz, 2017).…”