The Effect Of Independent Board On Stock Liquidity In East Asian Countries

Bazrafshan, Ebrahim (2016) The Effect Of Independent Board On Stock Liquidity In East Asian Countries. PhD thesis, Universiti Sains Malaysia.

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    Abstract

    Kajian ini menyiasat hubungan antara komposisi ahli lembaga dan kecairan saham syarikat dengan menggunakan sampel dari negara Asia Timur. Data yang dikumpulkan merangkumi 2,407 buah firma-tahun untuk syarikat disenaraikan dalam bursa saham di negara China, Hong Kong, Jepun, Malaysia, Singapura, Korea Selatan, Taiwan, Thailand, dan Indonesia dari tahun 2003 hingga 2013. Untuk menekankan isu endogeniti, kajian ini mengendalikan panel Generalized Method of Moments (GMM) yang dinamik bagi mengawal endogeniti yang dinamik, heterogeniti yang sukar diperhatikan dan keserentakan. Kajian ini menemui bukti yang kukuh bahawa secara signifikannya, semakin besar kebebasan lembaga maka semakin tinggi kecairan saham dalam syarikat tersebut. Kajian ini mencadangkan bahawa impak kebebasan ahli lembaga terhadap kecairan saham dipengaruhi oleh tiga saluran. Saluran-saluran tersebut adalah mengenai aliran maklumat daripada pengurus syarikat kepada pihak lembaga dan orang awam: (1) Apabila pihak lembaga sedang mempertimbangkan penggantian CEO, aliran maklumat daripada CEO kepada lembaga syarikat mungkin akan terhalang. Situasi menjadi semakin teruk apabila lembaga lebih bebas daripada CEO. Kajian ini mendapati dalam tempoh pertimbangan penggantian tersebut, pengaruh daripada kebebasan ahli lembaga terhadap kecairan saham akan terjejas. (2) Apabila pembuat pasaran bersedia untuk memproses maklumat secara bebas, kepentingan kebebasan lembaga terhadap kecairan saham akan berkurang. (3) Akhirnya, kajian ini juga mendapati bahawa apabila terdapat perlindungan yang besar terhadap para pelabur, kepentingan penyeliaan lembaga pengurus terhadap kecairan saham berkurang, dan seterusnya mengurangkan pengaruh kebebasan ahli lembaga terhadap kecairan saham. This study investigates the relationship between board composition and liquidity of a firm’s shares using sample from East Asian countries. The data comprises 2,407 firm-year observations of listed companies in the stock markets of China, Hong Kong, Japan, Malaysia, Singapore, South Korea, Taiwan, Thailand, and Indonesia over the period 2003-2013. To address endogeneity issue, this study conducts a dynamic panel generalized method of moments (GMM) to control for dynamic endogeneity, unobservable heterogeneity, and simultaneity. The present study finds strong evidence that greater board independence significantly increases liquidity. In this study, the impact of board independence on liquidity is suggested to be affected by three channels of information flow from managers to the board and the public: (1) when the board is in the midst of considering replacing the CEO, the flow of information from the CEO to the board may be impeded. This effect clearly can be exacerbated when the board is more independent of the CEO, and this study finds that in these periods, the beneficial impact of independence on liquidity is impaired; (2) when market makers are better equipped to process information independently, the importance of board independence on liquidity is reduced; (3) finally, when there are already greater investor protections in place that make board supervision of managers less crucial, this will reduce the impact of independence board on liquidity.

    Item Type: Thesis (PhD)
    Subjects: H Social Sciences > HD Industries. Land use. Labor > HD28-70 Management. Industrial Management
    Divisions: Pusat Pengajian Pengurusan (School of Management)
    Depositing User: Mr Noorazilan Noordin
    Date Deposited: 20 Feb 2017 15:34
    Last Modified: 20 Feb 2017 15:34
    URI: http://eprints.usm.my/id/eprint/32142

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