Does Smart Power of ASEAN Cooperation Influence Firm Value? Evidence from Geopolitical Perspective

Mohd Fairuz Md. Salleh (), Yusoff Wan Sallha () and Norida Basnan ()
Additional contact information
Mohd Fairuz Md. Salleh: Universiti Kebangsaan Malaysia
Yusoff Wan Sallha: Universiti Malaysia Perlis
Norida Basnan: Universiti Kebangsaan Malaysia

Acta Universitatis Danubius. OEconomica, 2016, issue 12(3), 83-97

Abstract: This study examines the influence of the ASEAN cooperation on firm value. As far as the cooperation of the Association of Southeast Asian Nations (ASEAN) is concerned, one aspect of geopolitical mechanisms is ASEAN?s smart power which combines hard and soft power. This smart power is considered an important mechanism for corporate strategies. Any changes in geopolitical decision between the ASEAN members will affect firm value especially firms segmented in the ASEAN countries. From a geopolitical perspective and by using data from public listed firms in Malaysia that were actively traded in ASEAN countries from 2009 to 2013, the study examined the influence of hard power indicated by military power, and soft power which refers to material resources and social power in terms of the relationship of political elites. The study found that the soft power of the ASEAN cooperation is positively associated with firm value. In contrast, the social power of political elites is negatively related to firm value, while the hard power fails to show any influence. Overall, the evidence suggests that corporate strategies should consider the benefit of ASEAN?s material resources and the risk of forging relationships with political elites when designing market penetration strategies.

Keywords: Geopolitics; Firm Value; ASEAN Cooperation; Political Economy. (search for similar items in EconPapers)
Date: 2016
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://journals.univ-danubius.ro/index.php/oeconomica/article/view/3354/3277 (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:dug:actaec:y:2016:i:3:p:83-97

Access Statistics for this article

More articles in Acta Universitatis Danubius. OEconomica from Danubius University of Galati Contact information at EDIRC.
Bibliographic data for series maintained by Daniela Robu ().