Agency cost of Shariah governance and impact on fund value in Malaysia

The mutual fund has become an increasingly important investment vehicle for retail investors, especially among households. Besides developing an institutional investment as efficient momentum trader and information extractor, separation of ownership and control prevails within a mutual fund contract...

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Main Author:	Sofi, Mohd Fikri
Format:	Thesis
Language:	English
Published:	2018
Subjects:	Finance - Religious aspects - Islam Corporate governance Finance - Malaysia
Online Access:	http://psasir.upm.edu.my/id/eprint/69794/1/gsm%202019%203%20ir.pdf
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id	my-upm-ir.69794
record_format	uketd_dc
spelling	my-upm-ir.697942019-11-12T00:40:35Z Agency cost of Shariah governance and impact on fund value in Malaysia 2018-10 Sofi, Mohd Fikri The mutual fund has become an increasingly important investment vehicle for retail investors, especially among households. Besides developing an institutional investment as efficient momentum trader and information extractor, separation of ownership and control prevails within a mutual fund contract during asset movement to fund management given an expected level of return by investors. The unobserved activities and widely magnitude decision skills of managers with the tendency of self-interest distress the shareholders, predominantly in Shariah Mutual Fund (SMF), pertaining to conflicting dual investing interests. High concern on fund value by performance is equally important that all generating return incomes are engendered from activities and course of actions that are in accordance to Shariah principle. This study aims to examine the effectiveness of multiple internal governance control mechanisms comprising ownership concentration, the board structure, and fund fees, especially when additional governance of Shariah Advisory Panel (SAP) emerges in a complex governance structure of fund management between Shariah and conventional within principal-agent relationship. Moreover, the objective also devotes on measuring SAP material to agency cost and the linking relationship. An assortment of data attributes to mutual fund is obtainable from published annual reports, while other data, such as monthly dividend adjusted Net Asset Value (NAV) and monthly market index return are possibly retrieved from Datastream to measure fund value market return. Dynamic panel data regression is employed to generate model that best explains unbiased estimation controlling for many recent econometric issues, such as endogeneity to avoid spurious evidence. The main finding indicates a significant association of Shariah governance with agency cost despite the absence in difference for a greater level of agency cost in such a more complex governance structure fund. However, there is only little or weak evidence between the relation of Shariah governance and fund value Nevertheless, the coefficients direction are consistently negative following an increase in fund operational expenses. Finance - Religious aspects - Islam Corporate governance Finance - Malaysia 2018-10 Thesis http://psasir.upm.edu.my/id/eprint/69794/ http://psasir.upm.edu.my/id/eprint/69794/1/gsm%202019%203%20ir.pdf text en public doctoral Universiti Putra Malaysia Finance - Religious aspects - Islam Corporate governance Finance - Malaysia
institution	Universiti Putra Malaysia
collection	PSAS Institutional Repository
language	English
topic	Finance - Religious aspects - Islam Corporate governance Finance - Malaysia
spellingShingle	Finance - Religious aspects - Islam Corporate governance Finance - Malaysia Sofi, Mohd Fikri Agency cost of Shariah governance and impact on fund value in Malaysia
description	The mutual fund has become an increasingly important investment vehicle for retail investors, especially among households. Besides developing an institutional investment as efficient momentum trader and information extractor, separation of ownership and control prevails within a mutual fund contract during asset movement to fund management given an expected level of return by investors. The unobserved activities and widely magnitude decision skills of managers with the tendency of self-interest distress the shareholders, predominantly in Shariah Mutual Fund (SMF), pertaining to conflicting dual investing interests. High concern on fund value by performance is equally important that all generating return incomes are engendered from activities and course of actions that are in accordance to Shariah principle. This study aims to examine the effectiveness of multiple internal governance control mechanisms comprising ownership concentration, the board structure, and fund fees, especially when additional governance of Shariah Advisory Panel (SAP) emerges in a complex governance structure of fund management between Shariah and conventional within principal-agent relationship. Moreover, the objective also devotes on measuring SAP material to agency cost and the linking relationship. An assortment of data attributes to mutual fund is obtainable from published annual reports, while other data, such as monthly dividend adjusted Net Asset Value (NAV) and monthly market index return are possibly retrieved from Datastream to measure fund value market return. Dynamic panel data regression is employed to generate model that best explains unbiased estimation controlling for many recent econometric issues, such as endogeneity to avoid spurious evidence. The main finding indicates a significant association of Shariah governance with agency cost despite the absence in difference for a greater level of agency cost in such a more complex governance structure fund. However, there is only little or weak evidence between the relation of Shariah governance and fund value Nevertheless, the coefficients direction are consistently negative following an increase in fund operational expenses.
format	Thesis
qualification_level	Doctorate
author	Sofi, Mohd Fikri
author_facet	Sofi, Mohd Fikri
author_sort	Sofi, Mohd Fikri
title	Agency cost of Shariah governance and impact on fund value in Malaysia
title_short	Agency cost of Shariah governance and impact on fund value in Malaysia
title_full	Agency cost of Shariah governance and impact on fund value in Malaysia
title_fullStr	Agency cost of Shariah governance and impact on fund value in Malaysia
title_full_unstemmed	Agency cost of Shariah governance and impact on fund value in Malaysia
title_sort	agency cost of shariah governance and impact on fund value in malaysia
granting_institution	Universiti Putra Malaysia
publishDate	2018
url	http://psasir.upm.edu.my/id/eprint/69794/1/gsm%202019%203%20ir.pdf
_version_	1747812727770841088

Agency cost of Shariah governance and impact on fund value in Malaysia

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