Determinants of Accounting-based Performance: Evidence from Bursa Malaysia

Authors

  • 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

DOI:

https://doi.org/10.32890/ijms.25.1.2018.10492

Keywords:

Risk-Return Relationship, Reverse Size Effect, System-GMM

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

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Published

13-12-2017

How to Cite

Ismail, R., Abdullah, N. A. H., & Taufil Mohd, K. N. (2017). Determinants of Accounting-based Performance: Evidence from Bursa Malaysia. International Journal of Management Studies, 25(1), 82–104. https://doi.org/10.32890/ijms.25.1.2018.10492