Chee-Wooi Hooy

University of Science Malaysia | USM · School of Management

Manuscript type: Research paper Research aims: This study examines the effect of operating cash flows (OCF) on firm innovation, as represented by the adoption of fourth industrial revolution (IR4.0) technologies. Board characteristics that act as corporate governance mechanisms are introduced as moderators. Design/Methodology/Approach: The study sa...

This study investigates the impacts of CEO personal characteristics on the IR4.0 adoption of 954 publicly listed companies in Bursa Malaysia in 2019. Logistic regression analysis is employed to assess the determinants of the IR4.0 adoption. This study contributes to the literature related to the risk preference of CEOs and proxy of IR4.0 adoption f...

Business sustainability calls for responsibility in the context of the environmental, social, and governance (ESG) agenda. According to the upper echelons’ theory, a firm’s activities and business outcomes are charted by top management. However, how the Chief Executive Officer (CEO) balances the firm’s profit maximisation objectives while serving t...

Manuscript type: Research paper Research aims: Liquidity creation is deemed important in the emerging markets banking industry. It turns out to be more challenging when subject to ownership issues, particularly state ownership. The government possesses substantial ownership in many large banks in Asian emerging markets and has a significant effect...

Purpose This study aims to investigate the relationship between political connections and the over-indebtedness of firms in the construction industry. Furthermore, this study explores the moderating effect of corporate governance mechanisms with monitoring intent on this relationship. Design/methodology/approach This study uses the data from China...

This paper studied the restaurant branch’s revenue to determine the best strategic location with period of study from 1996 until 2014. On the other hand, the paper examined multiple linear regression, decision tree regression, random forest regression and support vector regression to forecasting approach that will likely generate the highest accura...

This paper introduces an alternate measure of idiosyncratic risk leveraged from the decomposition method to further eliminate the residual systematic risk inherent in the factor asset pricing model. Combining both complementary techniques contributes to a more comprehensive firm-level idiosyncratic risk that is crucial in both portfolio diversifica...

The worldwide growth in the level of corporate cash holding has prompted scholarly interest. Grounded on the precautionary motive of cash, we aim to provide a behavioural explanation to this phenomenon by exploring the relation between CEO age and corporate cash holdings. We further examine the institutional factor that may exert an influence on th...

Malaysia experienced unusual political turmoil during the general elections in 2008 (GE 2008) and 2013 (GE 2013). This study examines how such exogenous political shocks affect the stock price crash risk of politically connected firms (PCFs) compared to non-PCFs in Malaysia. The data for this study covers from the year 2002 to 2017. A balanced pane...

The primary purpose of this study is to develop a novel framework to explain the effects of data-driven leadership in IR4.0 adoption on firm performance. We proposed four dimensions for the data-driven leadership: (1) the experience of key personnel with IR4.0 adoption, (2) the appointment of a chief information officer (CIO), (3) the establishment...

This study investigates Muslim CEOs' risk-taking and firm performance. Unlike the other Islamic countries, our focus on Malaysia because the public listed firms have well mixture of Muslim and non-Muslim CEOs, in the addition that the CEOs exhibit heterogenous demographic profile in gender, degree of education and foreign educational exposure. We a...

Public-private-partnership mode helps to better solve the problems in financing, technology, and management of public goods by effectively utilizing the respective advantages of government and private sector. There are myriad researches on risk-sharing, benefit distribution, asset securitization, and capital structure of PPP projects these days. In...

This study investigates the impact of corporate governance code revisions on corporate social performance, and its’ moderating effect on the relationship between corporate social performance and firm value. This study applies the two-stage Heckman sample selection bias approach to tackle endogeneity issues. The sample includes public listed firms f...

This study examines the generation effects on managerial risk-taking by decomposing between-generation variation and within-generation variation. Using 6,169 firm-year observations in Malaysia data from 2009 to 2017, for the between-generation effect, we find that Pre-War II and Pre-Independence CEOs undertake lower levels of risk-taking while Post...

The value of political connection is driven by economic power, rather than the political power of the government per se. We examine this with Malaysia's Covid-19 economic lockdowns where the government gained unprecedented economic power. Changes of 3 governments over 2020-2021 allow us to verify whether changes in political power per se creates va...

This study investigates the relationship between political connection and firm stock volatility. We examine whether stock return volatility of politically connected firms differ from non-connected firms during four events. These four events are general election, change of leadership, announcement of government budget, and announcement of policies b...

Our paper uses a multidimensional analysis to provide a better insight on the relationship between CEO foreign experience and corporate risk-taking. By decomposing the foreign experience of CEOs from developing economies such as Malaysia, we find that CEOs who have studied in OECD countries undertake higher levels of risk-taking and CEOs’ foreign w...

Purpose This study investigates the effect of board independence on private information-based trading (PIBT) events. This study also examines the interaction effects of firm's disclosure quality and the statutory and demographic roles of independent directors and board diversity attributes, respectively, on the relationship between board independen...

Purpose This study aims to examine the effects of investor protection (PROT), internal and external corporate governance (CG) on private information-based trading (PIBT). Design/methodology/approach This study uses a sample of 3,438 firms from 42 countries for the period 2002–2015 to examine the effects of the broad and specific measures of PROT,...

The present study examines the relationship between corporate social responsibility (CSR) and firm value, and the effects of corporate governance code revisions on the relationship. We examine this relationship for: (i) a high‐income country, Japan; (ii) middle‐income countries China, Malaysia and Thailand; and (iii) low‐income countries India and...

This study investigates state ownership on risk-taking behaviour in Malaysia’s banking industry. Using the panel of Malaysian commercial banks, this paper examines whether banks’ risk-taking is affected by Malaysian government ownership through the five largest investment arms of Malaysia (GLICs). The findings show that state-owned banks exhibit hi...

This study investigates state ownership on risk-taking behaviour in Malaysia’s banking industry. Using the panel of Malaysian commercial banks, this paper examines whether banks’ risk-taking is affected by Malaysian government ownership through the five largest investment arms of Malaysia (GLICs). The findings show that state-owned banks exhibit hi...

This study investigates the relationship between Muslim CEOs and bank risk-taking based on Indonesian banks from 2010 to 2017. We find that there is no significant difference in risk-taking among Indonesian banks based on whether the banks have Muslim CEOs or not. However, we find that only state-owned banks with Muslim CEOs display significantly l...

This study investigates whether corporate diversification can be a predictability variable contender for future stock-price crash risk. Using a sample of Malaysian firms based on 2010-2015 data, our study shows evidence of the mitigating effect of diversification on crash risk, consistent with the theory of coinsurance effect. However, our further...

This study examines the effects of board gender diversity and investor protection on private information-based trading and its persistent form. The results generally show that board gender diversity plays a significant part in preventing stock trading activities based on private information as well as persistent private information-based trading. I...

The authors examine whether firm corporate governance (CG) contributes to lower stock-return volatility. Using the panel data of 1,252 public listed firms in Asia across 11 countries for 15 years, the authors document international evidence that CG has a stabilizing effect on firm stock-return volatility. The authors further examine whether increas...

This study analyses the effects of corporate ownership on Malaysian firm performance addressing issues on multiple control chains mechanism. In the context of Malaysian listed firms, ultimate ownership should be more appropriately reflecting the corporate ownership structure in Malaysia. Based on sample data 2001–2012, we found evidence of a nonlin...

This paper examines the mitigation effect of the ultimate ownership identity on the diversification discount under the emerging market's institutional setting. Using a sample of non-financial listed firms in Malaysia from 2002 to 2013, the study reveals that government ultimate ownership is able to mitigate the diversification discount better than...

Purpose The purpose of this paper is to examine whether any specific informal corporate governance mechanisms under consideration in this study, namely, political connection, business group affiliation and ownership concentration, are able to mitigate the diversification discount for emerging-market diversified firms using Malaysia as an examinati...

This paper examines the country-versus-industry debate in international diversification in the context of systematic risk. We employ the popular decomposition approach proposed by Heston and Rouwenhorst and cover 2,045 individual firms from 36 emerging countries across 39 industries. Generally, we find a domination of country factors in the sample...

This paper examines the relationship between various investor groups and stock liquidity for Malaysian public listed firms over the 2002–2009 sample period. Using the Amihud illiquidity ratio, we extend the literature by addressing the issues of investor heterogeneity, trading account types and the interactions of competing liquidity channels. The...

Purpose The purpose of this paper is to investigate whether board diversity in human capital and social capital effectively mitigates the negative impacts of crises on firm performance. Design/methodology/approach Cross-sectional time series data for 2001-2011 are collected from all the tourism-related public listed firms across four Asian marke...

This paper examines the possible determinants for the sources of country and industry variations in Association of Southeast Asian Nations (ASEAN) stock returns across financial crises. Using 4043 firms from 6 ASEAN countries and 40 industries, from 1990 to 2010, we found that lagged country return and concentration are among the determinants that...

This paper investigates the role of Muslim CEOs on the performance of Malaysian Shariah firms. Based on firm-level data from Bursa Malaysia from 2007 to 2013, we find no statistical difference between the performance of Shariah and non-Shariah firms; however, firms with Muslim CEOs do show lower performance levels relative to firms with non-Muslim...

This paper examines the relationship between foreign shareholding and stock price efficiency for Malaysian public listed firms over the 2002–2009 sample period. We use stock price delay as an inverse measure of price efficiency, and consider the speed of adjustment to local and global common factor information. The results show that foreign investo...

This study aims to reveal the mechanism of the influences of the full moon and high temperatures on investors’ Monday irrationality. In contrast to other studies, this research was built under a retroductive approach by using a time series quasi experimental study. Investors were directly assessed for their irrationality by using an adapted psychom...

This paper challenges the notion that seeking to increase disclosure may not necessarily improve firm performance. Using Hong Kong listed firms subject to increase the extent of disclosure, this paper shows that the net benefit of disclosure is contingent on conditions such as the quality and integrity of a firm's information. We demonstrate that a...

This study examines the links between the composition of the board of directors of 85 tourism firms in China, Hong Kong, Malaysia and Singapore and firm performance for the period 2001 to 2012. Distinctions are made between the composition of board's human and social capital, and it is generally found that diversity in board's social capital is pos...

Several studies have been employed to discuss the link between weather and market returns. However, our research is different in three ways. We employed in tropical country, added extreme condition, and covering the entire Indonesia weather proportionally. This paper revisits the weather-induced moods effect on economic behaviour and found that wea...

This paper describes a simulation based methodology utilizing simulation optimization technique in measuring an accurate Malmqusit productivity index (MPI) score. Given the high level of stochastic data in real environment, a novel methodology known as DCBA-MPI has been developed. An example of the mode application is shown in banking institutions....

This study aims to investigate the role of psychological biases in determining the day-of-the-week Monday irrationality in Bursa Malaysia using daily data from 1 January 1999 until 30 December 2011. First, our findings proved the existence of Monday irrationality in Bursa Malaysia. Second, our analysis found significant relationships between psycho...

This paper revisits relative efficiency of commercial banks in Malaysia using Data Envelopment Analysis (DFA) over the 2004-2012 periods. We take into account technological innovation in bank services, a new dimension that were not investigated by any previous literature. Our main findings are: (1) Commercial banks in Malaysian have higher pure tec...

This study contributes to develop a framework to measure the financial performance of banks in a stochastic setting. The framework comprises several steps, the first of which is the development of a financial performance measurement model to evaluate a bank's financial performance using a set of factors from the CAMEL (Capital adequacy, Assets, Man...

Application of early warning system (EWS) in predicting crisis has drawn a lot of research interests in earlier literature. Recent studies have shown that the development of new EWS models from different field such as artificial intelligence or expert system achieved better prediction than the old statistical model. This paper analyzes the predi...

Evidence supporting the weekend effect, also known as Monday Irrationality, has shown that conventional finance is unable to follow a rational behavior assumption. Many scholars have proposed a behavioral approach to explain this phenomenon; however, few studies have investigated this effect empirically. Interestingly, literature on weather pattern...

Is the prediction accuracy affected by the method used in the ensemble of the classifiers? This paper is a sequel of our experiment in order to find an answer for such question. Previously, we had conducted an experiment by using single classifiers in the machine learning against traditional statistical methods. The results showed that single class...

Currency crisis is like a never ending episode in the economic story. It occurs anytime and sometimes without any warning. Previous studies showed that researchers can actually see the sign of the crisis before it occurs. But the questions left are how accurate the sign given and what variables should researchers look up to see this ‘signal’? This...

In this study, a novel ensemble model which we named as nearest neighbour tree is introduced in order to forecast currency crisis. Through stacking, the k-nearest neighbour classifier is combined with LADTree, which is a multi-class alternating decision tree using the LogitBoost strategy in phase one. Those outputs from both classifiers are then us...

This paper shows that the resurgence of trade regionalism has a significant impact on stock market returns of the member countries in the ASEAN Free Trade Area (AFTA), Australia-New Zealand Closer Economic Relations Trade Arrangement (CER) and North American Free Trade Area (NAFTA). A trading bloc international capital asset pricing model (ICAPM) i...

Purpose – This article aims to examine how investor moods and aggressiveness differ in their state and influence investor stock market performance associated with the moon phase. The mechanisms and impact of full moon gravity on investor stock trading performance are explored through an experimental approach and econometrics model. Design/methodol...

Purpose – This paper aims to focus on the impact of China's export expansion on Malaysian monthly trading with to her 12 major trading partners over the liberalization era. Design/methodology/approach – The analytical framework comprises of both the export and trade balance models. Unit root and cointegration tests with break and error correction...

An ensemble of classifiers is proposed in this study where we combined the k-nearest neighbor classifier with LAD Tree through stacking. Two different data sets which are macroeconomic and the International Risk Country Risk are used for application. Both of the data are taken for 27 countries from the first quarter of 1984 until the fourth quarter...

There are many methods that had been experimented in the analysis of currency crisis. However, not all methods could provide accurate indications. This paper introduces an ensemble of classifiers by using Support Vector Machine that’s never been applied in analyses involving currency crisis before with the aim of increasing the indication accuracy....

Purpose ‐ This research aims to explore and explain the determinants of irrational financial decision making, especially the day-of-the week anomaly, by using psychological approach. Design/methodology/approach ‐ As it is a conceptual paper, this research explores the psychological biases literature and links it to the day-of-the week anomaly. Usin...

This paper re-examines the persistence and source of non-linear predictability in the stock markets of G7 countries. Applying the Brock–Dechert–Scheinkman (BDS) test on autoregression (AR)-filtered returns in rolling estimation windows, we find evidence of local non-linear predictability in all the sampled stock markets. To identify the source, we...

This study addresses the question of whether a more integrated stock market is associated with a higher degree of informational efficiency. We employ the adjusted pricing error from an equilibrium international asset pricing model as a proxy for market integration. The aggregate country-level price delay serves as an inverse measure of informationa...

This paper investigates the link between investor sentiment and stock returns in emerging Asian markets. Two dimensions of sentiment are examined: firm specific sentiment and market wide sentiment. Using panel regression with firm fixed effects, we show that firm specific sentiment strongly and positively affects stock returns after controlling for...

This paper examines the relationship between foreign shareholding and stock price efficiency for Malaysian public listed firms over the 2002-2008 sample period. We use stock price delay as an inverse measure of informational efficiency, and consider the speed of adjustment to local and global common factor information. The results show that foreign...

This paper investigates the asymmetric behavior and the influence of determinants on pair wise industrial correlations in Malaysian stock market over 1990 until 2010 period. We find that most of the pair-wise industrial correlations are highly correlated during bear market. The regression analysis shows that only market volatility significantly exp...

The forecasting of exchange rates remains a difficult task due to global crises and authority interventions. This study employs the monetary-portfolio balance exchange rate model and its unrestricted version in the analysis of Malaysian Ringgit during the post-Bretton Wood era (1991M1-2012M12), before and after the subprime crisis. We compare two A...

Research in financial markets which have special focus on emerging markets has gained momentum since the early 1990s. Today, the role of emerging countries in the world economy is significant. In the year 2010, more than 50 per cent of world output expansion at purchasing power parity (PPP) was contributed by emerging markets, the largest being Chi...

Momentum strategy entails buying stocks with a recent history of good performance and selling stocks with bad performance (Jegadeesh & Titman, 1993). On the contrary, contrarian strategy proposes a trading strategy of buying poorly performing stocks and selling better-performing stocks (De Bondt & Thaler, 1985). Underlying the contrarian strategy i...

Purpose – This research aims to explore and explain the determinants of irrational financial decision making, especially the day-of-the week anomaly, by using psychological approach. Design/methodology/approach – As it is a conceptual paper, this research explores the psychological biases literature and links it to the day-of-the week anomaly. Usin...

We construct a structural system that jointly examines Purchasing Power and Interest Parity conditions for Malaysia–China during 1996Q1–2010Q4. Structural VARX, VECMX, over-identifying restrictions, bootstrapping and persistent profiles are utilized in the analyses. We find support for interaction between the goods and capital markets of Malaysia–C...

A five-factor asset-pricing model is employed to estimate the systematic financial risk exposure of airlines in North America, Europe and Asia between 1990 and 2010. Our panel data reveal that the risk to North America airlines is positively related to operating leverage and profitability, but while European and Asian airlines also have risk positi...

This study examines the relationship between firm value and both international and industrial diversification involvements for a sample of 267 listed firms in Malaysia over 2001–2009. We find no evidence that international diversification has any significant impact on the firm value but industry diversification locally slightly increases firm value...

This study investigates the call warrant listing impact on its underlying stock based on Malaysian stock market. The study indicates that call warrant listing has no significant impact on the return, volatility, and bid-ask spread of its underlying stock. However, its trading volume tends to be higher in the post event period. The results suggest t...

Finance is based on rational behavior assumption. Thus, the existence of day-of-weekend anomaly in the market can be the anti thesis of the assumption. Much research suggested the role of psychology as the explanation of this anomaly. However, it is rare to find a research investigating the relationship between psychology and day-of-week anomaly (D...

This paper examines the role of common, country and industry effects in international diversification potential in ASEAN stock markets. Following a decomposition approach, we extract these effects from stock returns. We further examine the determinants of country effects using ICRG country risk indexes. Our sample comprises 3460 individual firms ac...

The Chinese Renminbi (RMB) and Malaysian Ringgit (MYR) are pegged to US Dollar during the 1997-98 Asian financial crisis and continued up until the China and Malaysia de-pegged their currencies and announced a new exchange rate regime at the same day on 21 st this paper study the predictability of monthly RMB/USD and MYR/USD exchange rates in diffe...

With regards to determining whether herding is spontaneous and irrational behaviour causing the Day-of-the Week Anomaly, this paper intersects the Christie and Huang (1995) herd behaviour model with French’s (1980) Day-of-the Week model in several layers of tests. We use firm-level data and investigate the return dispersion of 846 Bursa Malaysia st...

This is an empirical study on the influences of moon on 7 stock markets which are Indonesia, Malaysia, United Kingdom, United States, Philippines, Japan, and Thailand. The period is from January 1999 until December 2009 in daily basis. This study investigates the relationship between moon phase and market returns. We divided moon phases into new mo...

This paper examines the long run dynamics of exchange rate and bilateral export-import flows between China and Malaysia, from January 1990 to January 2008. The study is conducted based on the Autoregressive Distributed Lag bound testing procedure, the fully modified OLS, dynamic OLS and rolling estimations, as well as the generalised impulse respon...

With regards to determining whether herding is spontaneous and irrational behaviour causing the Day-of-the-week anomaly, this paper intersects the Christie and Huang (1995) herd behaviour model with French's (1980) Day-of-the-week model in several layers of tests. We use firm-level data and investigate the return dispersion of 846 Bursa Malaysia st...

This paper aims to find out what happen to the bank productivity in Malaysia during 2001-2008, that is the period of internet technology waves. Data envelopment analysis (DEA) technique is used to calculate and decompose the Malmquist index of total factor productivity (TFP) growth into technical change and change in scale efficiency. The study fou...

This paper compares one-step-ahead out-of-sample predictions on Malaysian Ringgit-US Dollar exchange rate using the generalized regression neural network for a range of forecasting horizons from 1991M3 to 2008M8. We find that the monetary fundamentals are significant in explaining the dynamics of Malaysian exchange rate in a longer forecast horizon...

Even though many researchers have proposed trading behavior as the explanation of the Monday Irrationality or Day-of-the Week anomaly, yet, it has still left without empirical evidence. This research aims to investigate empirically by gauging psychological approach whereas the affection bias (weather-induced mood, and moon-induced mood), and cognit...

This paper examines the long run dynamics of exchange rate and bilateral export-import flows between China and Malaysia. Our analysis contributed in using high frequency monthly data for the recent period from January 1990 to January 2008, based on the Autoregressive Distributed Lag bound testing procedure, the fully modified OLS, dynamic OLS and r...

Over the past 3 decades, none of valuation models is accepted as the most accurate valuation model. The most common debate in academic area is about Discounted Cash Flow (DCF) and Residual Income Valuation (RIV). Multiple screenings, a valuation model that common for practitioners are seldom investigated. This research conducted a test to investiga...

The lack of empirical dossiers on the examination of the weekend effect causes intrigues us to investigate its determinant in the trading behaviour perspective. Employing one traditional interaction dummy model, and one day-by-day model, we found the market index and size-based portfolios of weekend effect have been driven by the attention of inves...

We employ artificial neural networks (ANNs) and unconditional Vector Autoregressive model (VAR) to perform one-month-ahead out-of-sample predictions of both official and market Yuan/USD exchange rates using monetary fundamentals from 1992:M3 to 2010:M10. The optimal ANNs are attained systematically based on random validation sets. We empirically de...

This paper explores the mean reversion behaviour of three Japanese real exchange rates during January 1980-January 2010. The CPI- and PPI-based real yen/USD rates and real effective yen rates are examined using newly improved unit root tests allowing for endogenous break(s) in the linear and non-linear manner. We identify structural breaks in 1985...

This study looks into the pay-performance and monitoring issues in Malaysian government linked companies (GLCs). Our study utilizes 21 Malaysian public listed GLCs data from financial year 2001 until 2006. We adopt panel regression to study pay-performance relationship while the internal monitoring mechanism is measured by board independence. In ou...

This study measures the speed with which the aggregate stock market in 49 countries responds to global market-wide public information. Our empirical results show that there are wide variations in the aggregate price delay values over time and across countries. Subsequent panel analysis confirms previous firm-level evidence that market size, trading...

This paper employs a capital asset pricing model that incorporates both world and trading-bloc factors to show that the recent trend of trade regionalism has led to segmentation of world stock markets. The model is developed within a multivariate GARCH framework. The conditional time-varying betas are derived to examine the dynamics of risk exposur...