Determinants of Accounting-based Performance: Evidence from Bursa Malaysia

  • Rusmawati Ismail School of Economics, Finance and Banking, UUM College of Business Universiti Utara Malaysia
  • Nur Adiana Hiau Abdullah School of Economics, Finance and Banking, UUM College of Business Universiti Utara Malaysia
  • Kamarun Nisham Taufil Mohd School of Economics, Finance and Banking, UUM College of Business Universiti Utara Malaysia

Abstract

This study aims to examine the determinants of accounting-based performance of 531 non-financial Malaysian listed companies over the period 2004 to2012. System generalized method of moments reveals that both prior risk-taking behaviour and size are found to be important determinants of performance. A significant positive influence of prior risk-taking behaviour on performance implies that risk-averse managers are cognitively influenced by their capability in handling risky investments in the past; consequently enhance confidence in their ability to manage profitable investments. The result appears to support the capital asset pricing model implication. Meanwhile, a significant positive size-performance relationship suggests that investors and fund managers should focus on larger companies as they can have better stock performance.

Keywords: Risk-Return Relationship; Reverse Size Effect; System-GMM

Published
2017-12-13
How to Cite
ISMAIL, Rusmawati; ABDULLAH, Nur Adiana Hiau; TAUFIL MOHD, Kamarun Nisham. Determinants of Accounting-based Performance: Evidence from Bursa Malaysia. International Journal of Management Studies, [S.l.], v. 25, n. 1, p. 82-104, dec. 2017. ISSN 2180-2467. Available at: <http://e-journal.uum.edu.my/index.php/ijms/article/view/ijms.25.1.2018.10492>. Date accessed: 21 jan. 2022. doi: https://doi.org/10.32890/ijms.25.1.2018.10492.