Non-linearity between family control and firm financial sustainability: moderating effects of CEO tenure and education

Norazlin Ahmad (), Irene Wei Kiong Ting (), Imen Tebourbi () and Qian Long Kweh ()
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Norazlin Ahmad: Universiti Malaysia Pahang
Irene Wei Kiong Ting: Universiti Malaysia Pahang
Imen Tebourbi: Canadian University Dubai
Qian Long Kweh: Canadian University Dubai

Eurasian Business Review, 2022, vol. 12, issue 4, No 5, 719-741

Abstract: Abstract We investigate the non-linearity between family control and firm financial sustainability and the manner in which CEO tenure and education moderate the non-linear relationship. We apply fixed-effects panel regression and several alternative tests, including two-stage least squares, in studying 2844 firm-year observations of Malaysian publicly listed firms during the period 2009–2019. We find a non-linear U-shaped relationship between family control and firm financial sustainability. Specifically, once levels of family control exceed a certain threshold, the relationship between family control and firm financial sustainability becomes positive. Moreover, CEO tenure and education moderate this non-linearity. That is, when family control is at a low (high) level, both moderators lessen (increase) the negative (positive) effects of family control on firm financial sustainability.

Keywords: CEO tenure; CEO education; Family control; Firm financial sustainability; Non-linearity; Malaysia (search for similar items in EconPapers)
JEL-codes: L25 M20 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s40821-021-00197-7

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