Influence of political preference on the succession process and performance of family firms in Malaysia.

• Main Authors: Chua, Kah Yeen., Ngov, Ky Meng., Poh, Jasmine Jing Jing.
• Other Authors: Jian Ming
• Format: Final Year Project
• Language: English
• Published: 2009
• Subjects: DRNTU::Business::Operations management::Family owned business enterprises
• Online Access: http://hdl.handle.net/10356/18960
• Institution: Nanyang Technological University

This paper explores the influence of political preference on the successor choice of public-listed family firms, set against Malaysia’s unique socio-political environment. In addition, we investigate the impact of the change in political preference and corporate governance on family firms’ performance, over the seven-year succession process. Our findings suggest that when such firms receive high political preference on the board level, the chairmanship tends to be passed to family members as compared to unrelated professionals. Further, results associated with firms’ performance indicate that an increase in firms’ political preference will lead to better market performance but will bring about a decline in financial performance. Finally, we conclude from our findings that an improvement in the corporate governance of family firms would lead to better firm performance over the succession process.