Abstract
ABSTRACT This study analyses the effects of corporate ownership on Malaysian firm performance addressing issues on multiple control chains mechanism. In the context of Malaysian listed firms, ultimate ownership should be more appropriately reflecting the corporate ownership structure in Malaysia. Based on sample data 2001–2012, we found evidence of a nonlinear ownership–performance relationship following is inverse U shaped. Further test based on ownership identity showed that firms controlled by a foreign ultimate owner perform significantly better than other local firms. In terms of the control mechanism, we found that the use of multiple control chains by an ultimate owner has a negative impact on firm performance. Additionally, we found an interaction effect between ownership identity and control mechanism on firm performance. It appears that the adverse effect of multiple control chains is more pronounced for foreign firms.
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