Bank Negara Malaysia Research Articles

The Effect of Regulatory Oversight on the Association between Internal Governance Mechanisms and Audit Fees

Recent episodes of corporate scandals have resulted in higher levels of regulatory oversights and calls for enhanced corporate governance (CG) and audit quality. These measures impact audit fees which are intrinsically linked to CG. Whilst prior research examines the relationship between internal governance mechanisms and audit fees, the impact of regulatory oversight has not been examined. Hence, the primary objective of this study is to examine the moderating effect of regulatory oversight on the relationship between audit committee (AC) characteristics, internal audit (IA) function attributes and external audit fees in an emerging market, namely Malaysia. The Bursa Malaysia revised its Listing Requirements (BMLR) in 2008, requiring increased interaction between the AC and IA function. Prior thereto, Bank Negara Malaysia, had exercised oversight functions over financial institutions and insurance companies. They were and continue to be highly regulated. This study focuses on the pre- and post-revised BMLR, and also differentiates between highly regulated and less regulated industries. The contributions from this proposed study are threefold. Firstly, we expect the results to provide empirical evidence of the impact of the revised BMLR on audit to feedback to regulators of the efficacy of their CG policy initiatives. Secondly, this study will evidence the moderating role of such regulatory oversights on CG practices. Thirdly, given that prior studies show mixed results regarding the relationship between IA function and external auditing, whether substitutes or complementary, taking account of the regulatory environment may explain the mixed findings thus far. A methodological triangulation approach, involving qualitative and quantitative methods of data collection, through interviews with selected audit practitioners and data from firms’ annual reports, is used. The theoretical model to test the hypotheses is built upon the Simunic (1980)’s model further modified by Griffin and Lont (2007), incorporating the local nuances in the emerging economy context. Supervisors: Assoc. Prof. Dr. Susela Devi, Dr.Chan Wai Meng, Faculty of Business Administration and Accountancy, University of Malaya, Malaysia.

Managing The Trilemma: The Case of Malaysia

This paper discusses how Malaysia manages the trilemma, the conjecture that a country cannot simultaneously maintain an open capital account, an exchange rate stability, and monetary policy independence. Only two out of these three goals can be mutually consistent and policy makers have to decide which third goal to give up. The paper shows how Malaysia adopts an intermediate regime – a regime that enables policy makers to manage all the three goals simultaneously. The impact of the global financial crisis on the Malaysian economy and the policy options for Malaysia to deal with the recent huge capital outflows are discussed in this paper. The willingness by Bank Negara Malaysia to allow a certain extent of exchange rate adjustments in the face of current global crisis reflects that Malaysia is not exempted from the trilemma.

Measuring the perception of Malaysian SME towards e-commerce as an innovation

This paper presents a quantitative study in measuring the perception of Malaysian SME towards ecommerce as an innovation and factors affecting the adoption of it. It is concerned with initiatives that are intended to help SME in Malaysia to adopt E-commerce as an innovation. The research has two main emphases: First, it presents some preliminary findings on the perception of Malaysian SME towards E-commerce as an innovation; and the level of confidence towards E-commerce as an innovation. Second, it streamlines various initiatives by Ministry of International Trade and Industry (MITI), Small and Medium Industries Development Corporation (SMIDEC), BankNegara Malaysia and local governments in accelerating the acceptance of E-commerce by Malaysian SME. The study engaged 38 SME participants through a survey using a self-administered questionnaire. 32% of the surveyed SME are from the Type 1 Industry; comprising manufacturing, manufacturing related services, and agro-based services and about 68% are from Type 2 Industry comprising services, primary agriculture, and ICT. The self administered questionnaire consists of two sections. Section I contains demographic information and SME specification while Section II contains 37 items: 31 items utilised Likert Scales items ranging from 1 (strongly disagree) to 5(strongly agree), and six items utilised defined interval scales. Rogers' attributes of innovations (2003): relative advantage, compatibility, complexity, trial ability and observability were used in the construct of the research instrument. This research emphasizes on Rogers'framework, as it was found useful where the study sought to understand the diffusion and use of Ecommerce by Malaysian SME in the investigation. Descriptive statistics were used to analyse and present empirical data of the 38 SME. The results from the quantitative data provided information on addressing barriers to SME, and confirmed the characteristics of Rogers' adoption categories. The study shows that the instrument which was designed with seven constructs lacked internal consistency in two determinants: relative advantage and observability. Findings interpreted through Rogers' theory suggest that an action plan should include initiatives to help SME towards E-commerce as an innovation.

Kedudukan Mazhab Syafi'i dalam Isu-isu Muamalat di Malaysia

This paper aims to analyse the degree to which the views of the shafi'ite are taken into account in the deliberation of shariah resolutions, pertaining to muamalt issues in Malaysia. To archieve this, the paper will analyse various Shariah resolutions and justifications made by the Syariah Advisory Council of Securities Commision Malaysia and Syariah Advisory Council of Bank Negara Malaysia. From this analysis, the relevence of the shafi`ite school on this matter will be deduced.

MONETARY POLICY IN A SMALL OPEN ECONOMY: THE CASE OF MALAYSIA

This paper provides a case study to characterize the monetary policy regime in Malaysia, from a medium‐ and long‐term perspective. Specifically, we ask how the Central Bank of Malaysia, Bank Negara Malaysia (BNM), has structured its monetary policy regime, and how it has conducted monetary and exchange rate policy under the regime. By conducting three empirical analyses, we characterize the monetary and exchange rate policy regime in Malaysia by three intermediate solutions on three vectors: the degree of autonomy in monetary policy, the degree of variability of the exchange rate, and the degree of capital mobility.

Prosper-Thy-Neighbour Policies: Malaysia´ s Contributions after the Asian Financial Crisis

I. Introduction The emergence of the Asian financial crisis in 1997 and its subsequent negative impact on Malaysia's economy in 1998 disrupted the decade-long sterling economic growth that the country had enjoyed prior to the crisis. Although the economy recovered quickly in 1999, there were numerous external and internal challenges that have confronted it since then. Externally, the catastrophe of September 11 and global downturn in 2001/2002 as well as the emergence of health risks associated with the Sudden and Acute Respiratory Syndrome (SARS) and the avian flu in 2003, the tsunami in 2004, and escalating oil prices in 2005/2006 all posed different challenges to Malaysia's small, open economy. Internally, steering the country to the next stage of require a continuous search for a balance between further liberalization and the needs of the country. While the former is dictated by the size of Malaysia's relatively small domestic economy, the latter also includes the restructuring of society according to ethnic considerations and goals as encapsulated in the New Economic Policy (NEP). In spite of its own struggles with development, Malaysia is mindful that poor neighbours can be a source of problems which may spill over its borders, thereby undermining the peace and prosperity of the country (Mahathir 1997, p. 2). Hence, during his tenure as Prime Minister, Tun Mahathir advocated the use of prosper-thy-neighbour policies or policies that seek to assist neighbouring countries to develop together with Malaysia. Post Mahathir, the continued use of this policy is very much in line with ASEAN's Vision 2020 that envisaged ASEAN as a community of caring societies where there would be equitable access to opportunities for total human development and in which the gap among member economies would be reduced even as members forged closer economic integration (ASEAN 1997 as cited in UNDP 2004, p. 124). Based on this Vision, the Initiative for ASEAN Integration (IAI) was adopted at the Fourth Informal Summit in 2000 in order to narrow the gap within ASEAN by assisting the new members--Cambodia, Laos, Myanmar, and Vietnam (or the CLMV countries)--to participate fully in regional economic integration. This plan was subsequently formally adopted at the ASEAN Ministerial Meeting in 2001 in its Hanoi Declaration on Narrowing the Development Gap for Closer ASEAN Integration. This paper is organized as follows: after the introduction, an assessment of the major reforms in the financial and the manufacturing sectors is presented in section II. The update on the Malaysian economy is followed by a comparison of the economic performance and human of Malaysia with that of the ASEAN-10 in section III in order to ascertain the extent of the gap between Malaysia and the other member countries. Malaysia's contributions to the IAI programmes are evaluated in section IV while section V draws some policy implications based on the analysis in the earlier sections. The conclusion in section VI summarizes the main findings of this paper. II. Post-Crisis Malaysian Financial and Manufacturing Sector II.1 Financial Sector Since the crisis was essentially a financial crisis, the focus of this section will be on the main reforms in the financial sector. Malaysia's financial sector is highly diversified and among the most advanced in the ASEAN region, with banks accounting for two-thirds of the sector in terms of assets, and non-bank financial intermediaries for one-third. There is an offshore financial sector in the province of Labuan that is the Labuan Offshore Financial Centre. After recovering from the Asian financial crisis, Bank Negara Malaysia (BNM), or the central bank, stepped up its financial reforms through the implementation of the Financial Sector Master Plan (FSMP, 2001-2010), which was launched in 2001. The FSMP has three phases; in the first phase, it focused on the building of domestic banking capacity. …

Malaysian financial system and the Asian financial crisis

The last decade has witnessed three distinct crises: 1992-93 European crisis, 1994-95 Mexican crisis and 1997-98 Asian crisis. The Asian financial crisis raised serious concerns about the vulnerability of the Malaysian financial system. Although the Malaysian economy as responded well to capital controls and other measures adopted by the government and Bank Negara Malaysia, concerns remain regarding their long-term viability. This paper attempts to explain the reasons for the success of the restructuring of the Malaysian financial system. In addition, the paper argues that, given the high level of competition faced by Malaysia's export oriented industries, especially from China, long term economic growth will require Malaysia becoming a regional financial centre. This would require Malaysia to remove all capital controls and allow its currency to fluctuate freely. Instead of relying on capital controls, the rate of accumulation of short-term foreign debt on be better controlled by a tax on short-term capital inflows.

EVALUATION OF TRADE POLICIES IN PENINSULAR MALAYSIA, 1965-85

The Developing EconomiesVolume 30, Issue 2 p. 117-128 Free Access EVALUATION OF TRADE POLICIES IN PENINSULAR MALAYSIA, 1965–85 PHANG Hooi Eng, PHANG Hooi EngSearch for more papers by this author PHANG Hooi Eng, PHANG Hooi EngSearch for more papers by this author First published: June 1992 https://doi.org/10.1111/j.1746-1049.1992.tb00008.x Although a staff of Bank Negara Malaysia, the views expressed are those of the author and not necessarily those of the bank. The author would like to thank an anonymous referee and referees of this journal for helpful comments on the first draft, but any remaining errors are the responsibility of the author. AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Share a linkShare onFacebookTwitterLinked InRedditWechat Volume30, Issue2June 1992Pages 117-128 ReferencesRelatedInformation

TECHNICAL EFFICIENCY MEASURES FOR THE MALAYSIAN FOOD MANUFACTURING INDUSTRY

The Developing EconomiesVolume 27, Issue 2 p. 174-184 Free Access TECHNICAL EFFICIENCY MEASURES FOR THE MALAYSIAN FOOD MANUFACTURING INDUSTRY K. P. KALIRAJAN, K. P. KALIRAJANSearch for more papers by this authorY. K. TSE, Y. K. TSESearch for more papers by this author K. P. KALIRAJAN, K. P. KALIRAJANSearch for more papers by this authorY. K. TSE, Y. K. TSESearch for more papers by this author First published: June 1989 https://doi.org/10.1111/j.1746-1049.1989.tb00153.xCitations: 14AboutPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL REFERENCES 1 Asian Development Bank. Key Indicators of Developing Member Countries of ADB ( Manila : Economics Office, Asian Development Bank, 1988). 2 Bank Negara Malaysia. Annual Report, 1987 ( Kuala Lumpur : Bank Negara Malaysia, 1988). 3 Berndt, E. R., and Christensen, L. R. The Translog Function and the Substitution of Equipment Structures, and Labour in US Manufacturing 1929–68,” Journal of Econometrics, Vol. 1, No. 1(1973). 4 Berndt, E. R., and Christensen, L. R. The Internal Structure of Functional Relationships: Separability, Substitution, and Aggregation,” Review of Economic Studies, Vol. 40, No. 3(July 1973). 5 Coelli, T. J., and Battese, G. E. A Frontier Production Function for Panel Data: With Application to the Australian Dairy Industry,” paper presented at the Australasian Econometric Conference, Melbourne, August 1986. 6 Friedman, M. Price Theory: A Provisional Text ( Chicago : Aldine Publishing Co., 1967). 7 Kalirajan, K. P., and Shand, R. T. A Generalized Measure of Technical Efficiency,” Applied Economics, Vol. 21, No. 1(January 1989). 8 Leibenstein, H. Allocative Efficiency Vs X-Efficiency,” American Economic Review, Vol. 56, No. 3(June 1966). 9 Malaysia. Fifth Malaysia Plan, 1986–1990 ( Kuala Lumpur , 1986). 10 Pitt, M. M., and Lee, L. F. The Measurement and Sources of Technical Inefficiency in the Indonesian Weaving Industry,” Journal of Development Economics, Vol. 9, No. 1(August 1981). 11 Scherer, F. M. Industrial Structure and Economic Performance ( London : Rand McNally and Co., 1970). 12 Schmidt, P. Frontier Production Functions,” Econometric Reviews, Vol. 4, No. 2(198586). 13 Schmidt, P., and Sickles, R. C. Production Frontiers and Panel Data,” Journal of Business and Economic Statistics, Vol. 2, No. 4(October 1984). 14 Stevenson, R. E. Likelihood Functions for Generalized Stochastic Frontier Estimation,” Journal of Econometrics, Vol. 13, No. 1(May 1980). 15 World Bank. World Development Report 1988 ( New York : Oxford University Press, 1988). Citing Literature Volume27, Issue2June 1989Pages 174-184 ReferencesRelatedInformation