MALAYSIAN CHINESE CEOS AND FIRM PERFORMANCE

Abstract

This paper investigates whether Malaysian Chinese CEOs produce higher firm performance, in particular, the effect of ethnicity on financial performance from cultural dimensions. While the cultural dimension receives widespread attention in economics and sociology research, it has received much less attention in finance studies. The data covered were hand collected information on CEOs and board characteristics of firms listed in Bursa Malaysia over the 2009-2015 period. Using panel regression, the study documented empirical evidence that Malaysian Chinese CEOs deliver higher firm performance, especially if they graduated from overseas. Results are consistent even after controlling for firm level corporate governance characteristics. The findings suggest that Malaysian Chinese CEOs possess some quality traits that enable them to deliver higher firm performance. This is not only due to their cultural beliefs, but education profile as well. These findings contribute practical implications for CEO selection in corporations.