Abstract
Using a sample of 185 companies in 2007, this paper investigates whether the mapping of earnings quality into intrinsic value for Malaysian companies differs as a function of ownership concentration type. It is hypothesized that compared with widely-held companies, the positive relation between earnings quality and intrinsic value is stronger (weaker) for companies dominated by the family of the Chief Executive Officer (Government-dominated companies). Intrinsic value was calculated from stock ratings produced by a firm of Malaysian investment consultants. Three measures of earnings quality are used: two approaches from the journal literature and sub-ratings for earnings and dividend stability produced by the firm of consultants. The results support the second hypothesis (Government-related investors) but not the first hypothesis (family-dominated companies). There is reasonable support for the theoretical predictions about the two earnings quality metrics from the journal literature. However, the consultant’s sub-ratings appear to provide a more accurate measure of earnings quality of Malaysian companies.
| Original language | English |
|---|---|
| Pages (from-to) | 24-47 |
| Number of pages | 24 |
| Journal | Journal of business and policy research |
| Volume | 7 |
| Issue number | 3 |
| Publication status | Published - 2012 |