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Purpose This study aims to investigate the drivers of successful equity crowdfunding campaigns in Malaysia. Design/methodology/approach Data for this study are collected manually from 5 different equity crowdfunding platforms in Malaysia. A total of 101 campaigns are analyzed, out of which the final sample used for this study is 97. The relationships are analyzed via ordinary least squares multiple regression analysis. Findings The results of the analysis show that minimum funding target, minimum investment required, pre-money valuation and length of pitch video are highly significant in influencing the success of the campaign. Percentage of equity retained is only significant at the 10% level. The size of the project team and the text length of the pitch are found to be insignificant. In addition, all the variables, except for equity retained and the minimum investment required, are found to have a positive impact on the success of an equity crowdfunding campaign in Malaysia. Originality/value To the best of the authors’ knowledge, this is the first study that investigates the success factors of equity crowdfunding campaigns in a developing country such as Malaysia. In addition, this study contributes to the literature on equity crowdfunding success via the inclusion of less-studied variables such as pre-money valuation and minimum investment required.

PurposeThe objectives of this study are to determine the level of awareness of crowdfunding and green projects among Bruneians, to investigate the preference of Bruneians regarding funding through crowdfunding as well as to evaluate the willingness of Bruneians to use crowdfunding as a funding alternative for green projects in Brunei. In addition to that, this study aims to identify the effects of environmental awareness and environmental concern on the willingness to crowdfund green projects.Design/methodology/approachA total of 177 responses from an online questionnaire distributed via convenience and snowball sampling was used for data analysis. Frequency, descriptive, correlation and regression analyses are used to achieve the aims of this study.FindingsThe study finds that the awareness of the concepts of crowdfunding and green project is high among Bruneians, but the level of their familiarity of crowdfunding platforms and climate change issues is very low. Regression analysis carried out to test the effects of awareness and concern on willingness indicates that while environmental concern has a significant positive effect on the willingness to support crowdfunded green projects, environmental awareness is insignificant.Originality/valueThe study highlights that government policy should be aimed at not just increasing awareness but at increasing the knowledge of the impacts of climate change issue that will raise concern and improve participation of residents in green projects. The study focuses on a rarely studied population, the people of Brunei.

Purpose This study aims to investigate the influence of various risk factors, specifically investment risk, legal risk and technology risk, on the decision of investors to invest in equity crowdfunding ventures in Malaysia. Design/methodology/approach A total of 169 valid responses out of a total of 195 questionnaires were distributed to individuals with prior knowledge of equity crowdfunding. The data from the responses are used to test the relationships using structural equation modeling partial least squares (SEM-PLS). Findings Investigation into the influence of risk factors on the willingness to support equity crowdfunding shows that investment risk and legal risk significantly influence the decision to support equity crowdfunding ventures, but technology risk does not. However, while the influence of investment risk is negative, legal risk is found to have a positive influence. Originality/value This study is important as, to the authors’ knowledge, this is the first study to empirically test the relationship between the various risks inherent in equity crowdfunding investments and the decision to invest. The study is also important to entrepreneurs and start-ups as it provides evidence that while the equity crowdfunding investment community follows the norms of investment, i.e. lower risk is preferred, stricter laws and regulations governing equity crowdfunding may not be needed or may only be relevant in countries where there are more retail, unsophisticated investors.

PurposeThe purpose of this study is to analyze the extent to which culture may affect the relationship between environmental, social and governance disclosure (ESGD) and firm performance (FP).Design/methodology/approachData for testing the hypotheses are collected from 668 firms in the energy sector worldwide over a period of eight years from 2009 to 2016. The analysis is carried out using the instrumental variables regression technique to account for endogeneity. Hofstede’s cultural dimensions of power distance (PD), masculinity (MASC), long-term orientation (LTO), uncertainty avoidance (UNCAVOID) and individualism (INDV) are used as proxies for culture.FindingsThe results show that ESGD has a significant negative impact on the profitability of energy firms. When cultural dimensions are taken into account, PD and LTO are found to significantly moderate the relationship between ESGD and FP, whereas MASC, UNCAVOID and INDV have no significant effect on the relationship between ESGD and FP.Practical implicationsThe findings of this study highlight the need for regulators to consider the importance of cultural dimensions when seeking to develop a single global standard for ESGD. In addition, regulators need to weigh both the costs and benefits of developing a global standard for it to be effective and acceptable.Social implicationsThis study emphasizes the need to take into account the cultural orientation of the society in which firms operate when devising strategies to fulfill societal expectations and achieve business goals.Originality/valueTo the best of the authors’ knowledge, this is the first study that addresses the role of culture in affecting the impact of ESGD on FP.

PurposeThis study investigates the influence of inter-firm linkages between small and medium enterprises (SMEs) and large firms on the relationship between an SME's creditworthiness and its access to finance.Design/methodology/approachSurvey questionnaire was distributed to 456 SMEs in the manufacturing sector in the Selangor and Federal Territory of Kuala Lumpur regions and a total of 145 useable responses were gathered. Investigation into the possible differences in the effect of creditworthiness – and its dimensions – on access to finance for SMEs with and without linkages are examined using Partial Least Squares-Multi Group Analysis (PLS-MGA).FindingsIt is found that the relationship between creditworthiness and access to finance is significant for both SMEs with and without links to large firms. However, no significant difference is found in the effect of creditworthiness on access to finance for both types of SME. Further analysis on the five different dimensions of creditworthiness shows statistically significant differences between SMEs with links and those without for the dimensions of collateral and condition. This implies that alliances formed between SMEs and large firms do not have much of an influence on the overall creditworthiness but do influence the collateral and condition of the SME.Originality/valueThis study contributes to the understanding of the effects of interfirm linkages on SME creditworthiness and access to finance. To the authors' knowledge no such study has been conducted on links between SMEs and large firms, especially in a developing country such as Malaysia.

Purpose This paper aims to examine the effect of geographical diversification on corporate liquidity in Malaysian firms. Liquidity is represented by both cash and working capital. Design/methodology/approach Data for this study is collected from a total of 735 firms over a period of five years, from 2010 to 2014, resulting in a total of 2,904 firm-year observations. The effect of geographical diversification on the cash and working capital of the firms is analyzed by using the ordinary least squares (OLS) with standard errors adjusted for firm level clustering and the quantile regression (QR) analyses. Control variables which represent the characteristics of the firms are also considered. Findings Analysis using the OLS regression technique indicates that geographical diversification has a highly significant positive influence on corporate cash holdings, while the influence of working capital is negative and its significance is only at the 10 per cent level. However, when QR is used to analyze the relationships, it is found that geographical diversification is only significant in positively influencing cash holdings for firms with low cash holdings, but the relationship is insignificant at high levels of cash holdings. Additionally, working capital is significantly influenced by geographical diversification at high levels of working capital but not at low levels. Originality/value To the author’s knowledge, this is the first study to analyze the influence of geographical diversification on liquidity by considering both cash and working capital. The effect of diversification on liquidity is mostly studied in developed countries, whereas this study is focused on a developing country. Additionally, this study uses QR to analyze relationships at different levels rather than at aggregate level as done in OLS regression analysis.

Purpose This study aims to investigate the role of interfirm alliances in the form of resource sharing in influencing the access to finance of small- and medium-sized enterprises (SMEs) in Malaysia. Further, the effect of different forms of resource sharing – tangible and intangible – is also studied. Design/methodology/approach Survey questionnaire was distributed to 456 SMEs in the manufacturing sector and a total of 146 responses were gathered. However, out of these, only 88 responses could be used as only these SMEs had alliances with large firms. Investigation into the relationship between interfirm alliances and SME access to finance was carried out using structural equation modeling – partial least squares. Findings It is found that interfirm alliances play a significant positive role in influencing SME access to finance. As interfirm alliances are measured as the extent of resource sharing, further analysis is carried out on the different forms of resource sharing, i.e. tangible and intangible. Tangible resource (asset and cost) sharing significantly influences SME access to finance but intangible resource (knowledge and information) sharing does not. Originality/value This study contributes to the understanding of the effects of interfirm alliances on the financing of SMEs. So far, most studies have only focused on the management and technological gains of interfirm alliances. Therefore, this study contributes significantly to literature on resource sharing among firms.

PurposeThe purpose of this paper is to investigate the effect of audit committee independence, board ethnicity and family ownership on earnings management in Malaysia.Design/methodology/approachThe effect of audit committee independence, board ethnicity and family ownership on corporate governance is investigated via 1,206 firm-year observations between the fiscal years of 2004 and 2009 of Bursa Malaysia listed firms. Panel data regression analysis is used to analyze the relationship.FindingsThe findings of this study fail to associate the role of audit committee independence as proposed under RMCCG (2007) in curtailing earnings management activities, thus supporting the findings on power distance scores that power granted to the top management may result in less effective independent directors. Nonetheless, in support of the alignment effect theory, family ownership is found to reduce earnings management activities. The findings show that corporate governance is more effective in developing country family firms due to their long history of family reputation and the importance of institutional culture factors.Research limitations/implicationsThis study focuses on board ethnicity, family ownership and its influence on earnings management.Originality/valueThis study offers insights into the importance of family institutional structures on corporate governance reforms in Malaysia as Malaysian family firms are mostly traditional firms that have built their reputation and strength in the industry for many generations.

Purpose The purpose of this study is to empirically assess the relationship between the dimensions of creditworthiness and access to finance of small and medium-sized enterprises (SMEs) in Malaysia, with creditworthiness as the mediating variable. The lack of empirical research on the relationship between creditworthiness and access to finance forms the motivation of this study. Design/methodology/approach Questionnaires covering various characteristics of the firms, their access to finance and creditworthiness were distributed to a total of 456 SMEs in the Kuala Lumpur and Selangor region for this purpose. A total of 158 responses were returned, of which 145 were usable responses and the relationships are tested using SEM-PLS. Findings This study finds that an SME and its owner’s character have significant influences on access to finance. An SME’s condition and its ability to provide high quality collateral are found to be highly significant in influencing its access to finance. Capacity is significant but its significance is low, while capital is insignificant. Creditworthiness has a significant positive influence on access to finance. Originality/value This study contributes to the important yet under-researched issue of access to finance for SMEs. It highlights the issue of character of applicant as an important dimension of creditworthiness that can significantly influence access to finance for SMEs.

This study aims to investigate the effect of board gender diversity on the transparency of environmental, social, and governance (ESG) disclosures in an emerging market such as Malaysia. Dataset is comprised of 568 firm‐year observations from 78 firms listed on the Bursa Malaysia. Ordinary least squares regression analysis of the data shows that ESG disclosure scores are significantly improved with the increasing presence of women directors on corporate boards. However, when the individual components are studied, the impact of board gender diversity varies. This study contributes to the limited but growing literature on ESG reporting quality and board gender diversity especially in emerging economies.

PurposeThe purpose of this paper is to examine the various factors that influence a small and medium enterprise’s (SME) decision to apply for bank loans.Design/methodology/approachData from survey responses of 145 SMEs from Selangor and the Federal Territory of Kuala Lumpur are used for this purpose. Exploratory factor analysis, logistic regression and SEM-PLS are used to analyze the data.FindingsThe findings from the survey show that an SME’s financial performance, its access to finance and its legal form play a significant positive role in its decision to apply for debt financing. Private limited SMEs that perform well and are able to access to various financing options are more likely to apply for financing. However, there is also evidence of a significant negative influence of credit history on the decision to apply for financing, as SMEs with a poor credit history are more likely to apply for financing. The age of an SME has weak influence while its size is found to be insignificant in influencing its decision to apply for financing.Originality/valueThe results imply the role of financial market imperfections such as adverse selection and information asymmetry in defining the SME’s demand for debt financing. The study contributes to a deeper understanding of the debt financing decisions of SMEs.

PurposeThe purpose of this paper is to detect variations in earnings management activity across industries and the possible influence of various industry variables on these variations.Design/methodology/approachA total sample of 4,249 firm-year observations from 13 different industries spanning a total of eight years (from 2005 to 2012) is used for this purpose. The ordinary least squares regression technique is used to test the influence of various industry variables on earnings management activity.FindingsThe findings indicate the presence of earnings management practices in Malaysian industries. Among industry-level variables, capital intensity, volatility and profitability are found to influence aggregate earnings management. Further analysis shows that volatility only influences the smoothing measure while profitability influences the discretionary measure. Interestingly, industry competitiveness and leverage are not able to explain the variations in earnings management across industries.Originality/valueTo the authors’ knowledge, this is the first study which documents the role of various industry characteristics in influencing earnings management activity. It highlights the importance of considering industry-level variables in a study on earnings management and, hence, adds to the growing literature on earnings management.

The study examined the impact of corporate diversification on dividend policy. It locates the investigation in Malaysia, using 712 firms listed on the main market of Bursa Malaysia for a 5-year period from 2010 to 2014. The results show that industrially diversified firms pay low dividends as the firms could not leverage economies of scope by diversifying into different industries. The firms’ motive to conduct industrial diversification activities may not be related to the enhancement of firm performance and shareholders’ wealth. In contrast, geographical diversification positively influences dividend policy and this relationship is in relation to the resource-based view hypothesis that discusses the efficient use of resources through the internal capital market. This study contributes towards our understanding of the impact of the different nature of diversification on firm-level dividend policies.

Purpose The management of liquidity has always been seen as a critical but often ignored issue in finance. Despite the abundance of studies on liquidity management, these studies mainly focus on developed countries and on large firms. Liquidity is critical for the small firm but studies on liquidity management in small and medium enterprises (SMEs) are lacking. The purpose of this paper is to examine the firm-level determinants of liquidity of SMEs in Malaysia. Design/methodology/approach Data are collected for a total of 986 small firms in Malaysia from 2011 to 2014, resulting in a total of 2,683 observations. Firm-specific variables and the effect of the economy are considered as the possible determinants of liquidity. Ordinary least squares (OLS) regression analysis with standard errors adjusted for firm-level clustering and quantile regression analysis are used for this purpose. Findings Analysis using OLS regression technique indicates that a firm’s profitability, its growth, asset tangibility, size, age and firm status are significant factors in influencing its liquidity decision. Leverage and economic condition are not found to have any significant influence on liquidity. However, quantile regression analysis provides a different picture especially for SMEs with liquidity at the quantile levels of θ=0.10 and 0.90. At θ=0.10, only profitability, tangibility and firm status are significant, while at θ=0.90, tangibility, size, firm status and, to some extent, age are significant in influencing liquidity levels. Originality/value To the author’s knowledge, this is the first study analyzing the liquidity decision of SMEs in an emerging market such as Malaysia. Most studies on liquidity management of SMEs are focused on developed countries due to data availability but these studies are also only a handful. Additionally, this study uses quantile regression analysis which highlights the need to analyze financial decisions at different levels rather than at the aggregate level as done in OLS regression analysis.

Objective: This study intends to theorize about how values and the perception of risk of the supporters of a crowdfunding project affect the success of the project. Methodology: A review of prior literature is carried out to identify the different dimensions of the decision making process. Implication: This research presents a conceptual framework to describe the influence of perceived values and risk on the success of crowdfunding in Malaysia. The crowdfunding phenomenon is relatively new in Malaysia and there is a lack of knowledge about the decision making of the ‘crowd’. The success and sustainability of the crowdfunding phenomenon depends on the supporters of the funds.

Purpose When a firm goes public for the first time, its prospectus serves as an important reference for investors. It is required by regulation that the risk factors which have significant influence on the business be disclosed in the prospectus. The purpose of this study is to analyze how disclosure of these risk factors influences the initial returns of initial public offerings (IPOs). Design/methodology/approach To do this, a sample of 96 Malaysian new equity offerings (IPOs) from year 2009 to year 2013 is used. Ordinary least squares regression technique is used to regress initial returns against risk disclosures. Aside from overall risk disclosure, individual dimensions of risk (internal risk, external risk and investment risk) are also considered. Findings Results of the regression analyses reveal a direct relationship between the IPO initial returns and the disclosure of risk. Overall risk disclosure is found to be highly significant in influencing initial returns. However, further investigation into the individual group of risks shows that only investment risk is highly significant in influencing IPO initial returns. Originality/value The results found in this study are interesting as, unlike prior studies, it is shown that disclosures of internal and external risks are not significant in influencing investors’ actions possibly because of their generalizability, whereas disclosures related to investment risks are significant. Equity of firms which disclose more of its risk factors can be expected to generate higher initial returns.

This study focuses on the influence of the Hajj pilgrimage on the Saudi stock market. Stock returns data of the Tadawul All-Shares Index (TASI) and several sector indices from January 2010 to August 2014 are used to examine the impact of the Hajj pilgrimage on the return and volatility of the stock indices. Using the ARMA(p,q)-GARCH(1,1) model, the results show that while the Hajj period has an insignificant negative influence on the mean return of the TASI and the sector indices, a significant increase in volatility is observed for the TASI and all the sector indices, except for the retail, agriculture and food and the petrochemical sectors. The increase in volatility is contrary to what has been found in prior studies but is consistent with the expectation that reduced participation due to religious beliefs and sentiments increases volatility of returns. This study contributes to the scant literature on cultural/religious anomalies in Islamic stock markets. The result being contrary to prior studies indicate that a deeper understanding of this stock market anomaly and the sentiments behind it is required.

Purpose The purpose of this paper is to focus on the influence of mood/emotions and religious experience on Islamic stock markets during the Ramadan month. Design/methodology/approach This study uses stock returns data of two countries – Saudi Arabia and Iran – from January 2008 to September 2014 and the ARMA-GARCH models to study impact of the Ramadan month on the return and volatility of the stock market in these two countries. Findings The results of this study show some differences in the impact of the Ramadan month on the return and volatility of the stock market in these two countries. While the Ramadan month has a significant positive influence on the mean returns and the volatility of the Saudi market, its influence on the Iranian market is found to be insignificant. Further analysis on the last ten days of the Ramadan month provides a similar result for the Saudi market. However, for the Iranian market, volatility is significantly negatively affected during these last ten days. Originality/value Most prior studies have found significant changes in returns during the Ramadan month but a deeper understanding of this stock market anomaly is needed. The results point toward the influence of mood/emotions and religious experience in explaining the existence of the Ramadan anomaly.

This study investigates the influence of audit committee characteristics on the likelihood of financial restatements by firms in Malaysia. Annual reports of 350 firms that have restated their finan...

This study focuses on the issue of religious anomalies, particularly the Hajj effect, influencing returns and volatility of the Saudi stock market (also known as the Tadawul All-Share Index). Using daily prices and trading volume of the index for a period of 9 years and the ARMA(1,1)–GARCH(1,1) model, it is found that returns are lower and volatility is higher during the Hajj period, although the effect is significant only for the volatility and not the returns.

Purpose The ineffectiveness of external governance mechanisms (laws and regulations) designed to curb insider trading in Malaysia leads this study to focus on the role of internal governance of firms in helping to reduce insider trading incidences. The purpose of this paper is to investigate the influence on institutional shareholders on insider trading activity. Design/methodology/approach The study uses data collected from a sample of 115 firms listed on the Bursa Malaysia over a five-year period (from year 2010 to 2014). Ordinary least squares technique is used to achieve the objective of this study. Findings The findings of this study points toward asymmetric information as a motivator for insider trading activity. Unlike previous studies which find the presence of institutional investors helping to reduce insider trading, this study finds results to the contrary. Originality/value This study focuses on the influence of institutional shareholdings on insider trading. The results provide more insight into the effectiveness of the role of institutions in curbing insider trading and suggest a closer monitoring of institutional shareholders.

This study is aimed at investigating the performance of Gold-backed cryptocurrencies during the COVID-19 crisis and in particular, during the bear market of 2020. Analysis is conducted on the daily returns of PAX Gold from 2 October 2019 to 28 September 2020 using the ARMA-GARCH model. The results are compared with those of Paxos Standard (PAX) and Gold during the same period. The results show the mean returns of the three financial instruments increase during crisis periods but the increase is insignificant. PAX Gold experiences increased volatility during the COVID-19 crisis and the bear market but the increase is insignificant.

Purpose – The vast amount of information available via online social networks (OSN) makes it a very good avenue for understanding human behavior. One of the human characteristics of interest to financial practitioners is an individual’s financial risk tolerance. The purpose of this paper is to look at the relationship between an individual’s OSN behavior and his/her financial risk tolerance. Design/methodology/approach – The study uses data collected from a sample of 220 university students and the backward variables selection ordinary least squares regression analysis technique to achieve its objective. Findings – The results of the study find that the frequency of logging on to social network sites indicates an individual who has higher financial risk tolerance. Additionally, the increasing use of social networks for social connection is found to be associated with lower financial risk tolerance. The results are mostly consistent when the sample is split based on prior financial knowledge. Originality/value – To the authors’ knowledge this is the first study which documents the possibility of understanding an individual’s financial risk tolerance via his/her social network activity. This provides investment/financial consultants with more avenues for gathering information in order to understand their current or potential clients hence providing better services.

Purpose – This paper aims to detect earnings management activity in different industries in Malaysia by using the earnings distribution model. Further, the prospect theory and the possible influence of various industry variables are tested to understand the role of the industry in the motivation to manage earnings among firms in Malaysia. Design/methodology/approach – A sample of 538 firms from 15 different industries over the years 2005-2011 is used for this purpose. The earnings distribution model is used to detect earnings management activity across industries, and various regression techniques are used to test the influence of the prospect theory and various industry variables on earnings management activity. Findings – The findings indicate the presence of earnings management practices in Malaysian industries, but the prevalence of earnings management activity and the motivation to do so are found to differ across industries. The prospect theory is found to be a possible motivation for earnings management overall but not when industries are considered separately. Industry competitiveness, capital intensity and profitability are found to influence both motivations to manage earnings while industry leverage is found significant only in the case of motivation to manage earnings to avoid reporting losses. Finally, earnings volatility and size are insignificant in influencing the propensity to manage earnings. Originality/value – To the authors’ knowledge, this is the first study which documents the role of various industry characteristics in influencing earnings management activity. It highlights the importance of considering industry level variables in a study on earnings management and, hence, adds to the growing literature on earnings management.

Purpose– The purpose of this paper is to measure the influence of six university qualities, namely academic quality, academic staff quality, management quality, industrial linkage quality and facilities’ quality, on students’ total experience (STE) and emotional attachment.Design/methodology/approach– Judgmental sampling is used to collect data from a sample of 489 undergraduate students of a private higher academic institution. The data are then analyzed using structural equation modeling.Findings– This study finds that only management quality forms a significant direct relationship with emotional attachment, whereas facility quality and industrial linkage form a significant relationship with emotional attachment only when mediated with STE.Originality/value– The results provide important findings to researchers and management of higher education institutions for future research directions.

Given the special characteristics of the Malaysian market, the current study aims to investigate the impact of variables from different levels (firm, industry and country) on the firms’ debt policies. Considering the dynamic nature of capital structure, the study takes the novel approach of examining three levels of determinants simultaneously with respect to time effect. To achieve this, the dataset is constructed from 171 firms listed on the Main Market of the Bursa Malaysia resulting in a total of 1026 firm-year observations within 2005–2010. The firms are from seven different sectors and 63 industries. Based on the ordinary least squares (OLS) results, growth opportunities, profitability, size, ownership, dividend, industry leverage and inflation rate have highly significant relationships with leverage. Board size and firm’s asset liquidity show 5 per cent predictive power while industry liquidity, lending rate and gross domestic products (GDP) demonstrate weakly significant influences on debt levels. Meanwhile, risk, tangibility, age, tax, industry concentration and non-debt tax shields (NDTS) represent insignificant values. Generalized method of moments (GMM) results are similar except for those of dividend and tax, which have opposite signs to the results in OLS, and profitability, firm liquidity and GDP, which lose significance compared to the OLS model. There is also evidence of firms adjusting to a target level of leverage.

Purpose – The purpose of this paper is to examine the relationship between working capital efficiency and firm value and the influence of financing constraints on this relationship. Design/methodology/approach – Data from 192 firms spanning a period of ten years (1999-2008) are used for this purpose and analyzed using the ordinary least squares regression technique. Findings – The study finds that improvements in working capital efficiency through reduction in working capital investment results in higher firm value. However, this relationship is influenced by the financing constraints faced by a firm. For financially constrained firms, working capital efficiency significantly increases firm value but it is found to be insignificant for unconstrained firms. Originality/value – To the author’s knowledge, this is the first study on the value of working capital in Malaysia or in any emerging market. Most studies on working capital valuation concentrate on developed countries and that too are only a handful. Hence this study contributes to the scarce literature on the valuation of working capital. This study also uses the model by Fama and French (1998) to evaluate the relationship between working capital and firm value, which has hardly been used in studies on working capital valuation.

Purpose – The purpose of this paper is to understand the motives behind the levels of cash holdings and the theory that may be able to explain why these firms hold so much cash. Design/methodology/approach – Annual financial data and stock prices of 192 firms from six different sectors on the Bursa Malaysia are collected for the period 2000-2007. Analysis using the non-parametric Kruskal–Wallis test is carried out to analyze industrial and time differences in cash holdings. The ordinary least square (OLS) regression technique is used to understand the relationships between various attributes with the level of cash holdings. Due to issues of endogeneity, the generalized method of moments method is also applied. Findings – Significant differences are found to exist in the level of cash holdings between firms and across time. It is found that firms adjust to a target level of cash holdings, although this is done relatively slowly. Also, significance of firm characteristics and their relationships with cash holdings indicate that other than the pecking order theory, the trade-off theory and the agency theory can help explain the level of cash holdings of firms in Malaysia. Originality/value – Most studies on cash holdings have been carried out in developed countries. Malaysia is an advanced emerging market with significant state control and firm structure being largely family-oriented. Hence, a study on a different market with different types of firm structures will contribute significantly to the existing literature on corporate cash holdings.

PurposeThe aim of this paper is to analyze the differences in bank characteristics of Islamic and conventional banks in Malaysia, especially when it comes to their profitability, capital adequacy, liquidity, operational efficiency and asset quality are also considered. Corporate governance issues and economic conditions are also included in the analysis.Design/methodology/approachA total of 14 banks (nine conventional and five Islamic) were considered over the period of 2005‐2009. Three stages of analysis were performed. First, descriptive statistics were computed to understand the differences in characteristics of the two types of banks. Next, to determine whether these differences were significant, independent t‐tests were carried out on each variable. Finally, regression analysis was carried out to analyze the effect of the variables on bank profitability.FindingsIt is found that the return on average assets, bank size and board size values of conventional banks was higher compared to Islamic banks. The other variables – operational efficiency, asset quality, liquidity, capital adequacy and board independence – were higher for Islamic banks. Significant differences between the two bank types were found for all the variables, except for profitability and board independence. All variables except for liquidity, board characteristics and type of bank, were found to be highly significant in affecting profitability.Originality/valueThis paper looks at the differences between Islamic and conventional banking systems in Malaysia. Contrasting results were found for the independent t‐tests and regression analysis, which makes it an interesting study that should be pursued further.