This study investigates the effect of direct political connection on the firm value of Malaysia’s top richest tycoon companies. We hypothesize that the wealthiest people are likely to hedge their political bets and are poorly related to direct political connections, which in turn conceal the direct political effect on firm value. The empirical evidence provides credence to this idea; in cases where the majority of the shares are controlled by “peripheral capitalism,” only government ownership has a positive and highly significant effect on the financial value of a firm. Meanwhile, the presence of politicians on board has a negative and low significant effect on the financial value of a firm. Results suggest the possibility of an indirect political connection among Malaysia’s top richest tycoon companies; the results also fit into the ongoing debate on estimating the value of political connection.


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pp. 87-100
Launched on MUSE
Open Access
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