Tobin’s Q and Its Determinants: A Study of Market Valuation in MISC Berhad

Syazwani, Anis (2019): Tobin’s Q and Its Determinants: A Study of Market Valuation in MISC Berhad.

Abstract

The study examines the impact of Tobin’s Q or market valuation determinants on firm corporate governance of MISC Berhad. Tobin’s Q of the firm represents the ratio of market capitalization plus long-term debt to total assets. This study employs time series regression analysis from 2012 to 2016. The findings show that only internal factors giving significant impact to the market valuation of the firm when it has been tested solely in Model 1 and combined for both internal and external factors in Model 3. Meanwhile, there is no significant result when the external factors were tested solely in Model 2. The multiple linear regression analysis shows that the Altman Z score is the most significant and positively influenced the market valuation of MISC Berhad.

• Item Type: MPRA Paper
• Language: English
• Keywords: Tobin’s Q, Market Valuation, Internal Factors, External Factors
• Subjects: E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles; E - Macroeconomics and Monetary Economics > E3 - Prices, Business Fluctuations, and Cycles > E31 - Price Level ; Inflation ; Deflation; G - Financial Economics > G3 - Corporate Finance and Governance > G32 - Financing Policy ; Financial Risk and Risk Management ; Capital and Ownership Structure ; Value of Firms ; Goodwill; G - Financial Economics > G3 - Corporate Finance and Governance > G33 - Bankruptcy ; Liquidation

References

Agrawal, A., & Chadha, S. (2005). Corporate governance and accounting scandals. The Journal of Law and Economics, 48(2), 371-406. Agrawal, A., & Cooper, T. (2017). Corporate governance consequences of accounting scandals: Evidence from top management, CFO and auditor turnover. Quarterly Journal of Finance, 7(01), 1650014. Bai, C. E., Liu, Q., Lu, J., Song, F. M., & Zhang, J. (2004). Corporate governance and market valuation in China. Journal of comparative economics, 32(4), 599-616. Bhagat, S., & Bolton, B. (2008). Corporate governance and firm performance. Journal of corporate finance, 14(3), 257-273. Black, B. S., Jang, H., & Kim, W. (2006). Does corporate governance predict firms' market values? Evidence from Korea. The Journal of Law, Economics, and Organization, 22(2), 366-413. Black, B. S., Love, I., & Rachinsky, A. (2006). Corporate governance indices and firms' market values: Time series evidence from Russia. Emerging Markets Review, 7(4), 361-379. Brown, L. D., & Caylor, M. L. (2004). Corporate governance and firm performance. Available at SSRN 586423. Daily, C. M., & Dalton, D. R. (1994). Corporate governance and the bankrupt firm: An empirical assessment. Strategic Management Journal, 15(8), 643-654. Dignam, A., & Galanis, M. (2008). Corporate governance and the importance of macroeconomic context. Oxford Journal of Legal Studies, 28(2), 201-243. Darrat, A. F., Gray, S., Park, J. C., & Wu, Y. (2016). Corporate governance and bankruptcy risk. Journal of Accounting, Auditing & Finance, 31(2), 163-202. Haniffa, R., & Hudaib, M. (2006). Corporate governance structure and performance of Malaysian listed companies. Journal of Business Finance & Accounting, 33(7‐8), 1034-1062. Kirkpatrick, G. (2009). The corporate governance lessons from the financial crisis. OECD Journal: Financial Market Trends, 2009(1), 61-87 Lang, W. W., & Jagtiani, J. A. (2010). The mortgage and financial crises: The role of credit risk management and corporate governance. Atlantic Economic Journal, 38(2), 123- 144. Pongsatat, S., Ramage, J., & Lawrence, H. (2004). Bankruptcy prediction for large and small firms in Asia: a comparison of Ohlson and Altman. Journal of Accounting and Corporate Governance, 1(2), 1-13.