The Role of Managerial Ownership in the Association between Goodwilland Firm Value

Aghdas Zargar and Zaleha Abdul Shukor
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Aghdas Zargar: National University of Malaysia, Kajang, Malaysia
Zaleha Abdul Shukor: National University of Malaysia, Kajang, Malaysia

International Journal of Business and Economic Affairs (IJBEA), 2016, vol. 1, issue 1, 47-59

Abstract: Aim of this study is to determine whether managerial ownership of Malaysian rms listed on the main boardof Bursa Malaysia moderates the relationship between goodwill disclosure and rm value based on signaling and agencytheory. In this quantitative study that uses a deductive approach, the analysis is based on the annual reports of 2,070 rms that are listed on the Bursa Malaysia website for the years from 2009 through 2011. Multiple regression was appliedin order to analyze the data. The results show that there was a positive and signi cant relationship between reportedgoodwill and rm value during these three years. However, when managerial ownership is included as a moderatingvariable, results show a signi cant negative association between reported goodwill and rm value. Results should alertMalaysian rms to the importance of understanding investors reactions towards a rms reported goodwill amounts. Ahigh goodwill amount is not necessarily a good sign about a rm in the presence of high managerial ownership. Elevatedlevels of managerial ownership may not be seen as positive signs, even for family-owned rms in Malaysia. This isprobably because managers are always perceived to be protecting their personal wealth rather than the rms overall wealth.

Keywords: Managerial ownership; Goodwill; Malaysian listed rms (search for similar items in EconPapers)
Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:aya:ijbeaa:2016:p:47-59

DOI: 10.24088/IJBEA-2016-11007

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