Board Characteristics and the Amount of Capital Raised in the Malaysian IPO Market

Posted: 29 Sep 2017 Last revised: 1 Dec 2017

See all articles by Bazeet Badru

Bazeet Badru

School of Economics, Finance and Banking. Universiti Utara Malaysia ; Universiti Utara Malaysia.

Nurwati A. Ahmad-Zaluki

Universiti Utara Malaysia - Othman Yeop Abdullah Graduate School of Business

Wan Nordin Wan-Hussin

Universiti Utara Malaysia - College of Business

Date Written: September 28, 2017

Abstract

This study examines the impact of board characteristics on the amount of capital raised through an IPO for a sample of 220 Malaysian IPOs over the period of 2005 to 2015, applying both ordinary least squares (OLS) and quantile regression (QR) techniques. The OLS results show that board with ethnic Malay directors has a significant and positive association with the amount of capital raised, while a weak significance is found for board size. However, the QR results reveal that other than board ethnicity, other board characteristics namely board size, board independence and CEO duality are significantly associated with the amount of capital raised. The additional results suggest that QR provides a more insightful and full picture into the association than does OLS. The overall empirical evidence lends support to the resource dependence role of the board of directors at the time of an IPO.

Keywords: Board size; Board independence; Capital raised; Ethnicity; Gender; Quantile regression

Suggested Citation

Badru, Bazeet and Ahmad-Zaluki, Nurwati A. and Wan-Hussin, Wan Nordin, Board Characteristics and the Amount of Capital Raised in the Malaysian IPO Market (September 28, 2017). Journal of Multinational Financial Management, 2017, Available at SSRN: https://ssrn.com/abstract=3044219

Bazeet Badru (Contact Author)

School of Economics, Finance and Banking. Universiti Utara Malaysia ( email )

Universiti Utara Malaysia
Sintok, Kedah 06010
Malaysia
+60147265986 (Phone)

Universiti Utara Malaysia. ( email )

Sintok, Sintok 06010
Malaysia
+60147265986 (Phone)

Nurwati A. Ahmad-Zaluki

Universiti Utara Malaysia - Othman Yeop Abdullah Graduate School of Business ( email )

Universiti Utara Malaysia
Kuala Lumpur, Kuala Lumpur 50300
Malaysia

Wan Nordin Wan-Hussin

Universiti Utara Malaysia - College of Business ( email )

Sintok, Kedah Darul Aman 06010
Malaysia
+604-7003939 (Phone)
+604-7005762 (Fax)

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