TY - JOUR AU - Chin Fei, Goh AU - Md. Rasli, Amran AU - Shi Xuan, Sia PY - 2019/03/06 Y2 - 2024/03/19 TI - MODELING THE HETEROGENEITY OF CORPORATE GOVERNANCE MECHANISMS ACROSS INDUSTRIES: A MULTI-GROUP ANALYSIS USING PLS PATH MODELING JF - Journal of Contemporary Issues and Thought JA - JCIT VL - 5 IS - 0 SE - Articles DO - UR - https://ejournal.upsi.edu.my/index.php/JCIT/article/view/1023 SP - 50-65 AB - <p style="text-align: justify;">The aim of this research is to examine the heterogeneity of corporate governance mechanisms (i.e., ownership concentration, board independence and CEO duality) across technology-based and mature industries. Our research extends existing corporate governance literature by conceptualizing that the effectiveness of corporate governance mechanisms is contingent upon industry settings. Specifically, the performance of technology-based firms depends on management capacity to respond to rapid market and technological changes. In mature industries, on the contrary, firms generally face a relatively stable business environment and producing standardized products. We employed multi-group analysis in the Partial Least Squares (PLS) path modeling to analyze the heterogeneous effects of corporate governance mechanisms on firm performance. Multi-group analysis in PLS path modeling is more powerful than linear regression because the former can detect multigroup difference-effect and handle violation of normality assumption in causal inference for archival financial accounting research. Using a sample of publicly listed firms from manufacturing and plantation sectors in Malaysia, we found that ownership concentration and board independence (but not&nbsp;CEO duality) are heterogeneous with respect to corporate governance and firm performance. We conclude that a fine-grained industry setting offers more insights on the effectiveness of corporate governance mechanisms.</p> ER -