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Eurasian Business Review
Published in: Eurasian Business Review 4/2022

09-02-2022 | Regular Article

Non-linearity between family control and firm financial sustainability: moderating effects of CEO tenure and education

Authors: Norazlin Ahmad, Irene Wei Kiong Ting, Imen Tebourbi, Qian Long Kweh

Published in: Eurasian Business Review | Issue 4/2022

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Abstract

We investigate the non-linearity between family control and firm financial sustainability and the manner in which CEO tenure and education moderate the non-linear relationship. We apply fixed-effects panel regression and several alternative tests, including two-stage least squares, in studying 2844 firm-year observations of Malaysian publicly listed firms during the period 2009–2019. We find a non-linear U-shaped relationship between family control and firm financial sustainability. Specifically, once levels of family control exceed a certain threshold, the relationship between family control and firm financial sustainability becomes positive. Moreover, CEO tenure and education moderate this non-linearity. That is, when family control is at a low (high) level, both moderators lessen (increase) the negative (positive) effects of family control on firm financial sustainability.
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Footnotes
2
Bursa Malaysia (previously known as the Kuala Lumpur Stock Exchange) is the stock exchange of Malaysia.
 
3
The threshold level indicates that family ownership brings benefits to firm sustainability up to the optimal level at 53%. After the critical point at 53%, family ownership brings disadvantages to firm sustainability.
 
4
It is a database that provides key data sets from developed and emerging markets — equities, market indices, company accounts, macroeconomics, bonds, foreign exchange, interest rates, commodities and derivatives.
 
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Metadata
Title
Non-linearity between family control and firm financial sustainability: moderating effects of CEO tenure and education
Authors
Norazlin Ahmad
Irene Wei Kiong Ting
Imen Tebourbi
Qian Long Kweh
Publication date
09-02-2022
Publisher
Springer International Publishing
Published in
Eurasian Business Review / Issue 4/2022
Print ISSN: 1309-4297
Electronic ISSN: 2147-4281
DOI
https://doi.org/10.1007/s40821-021-00197-7

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