Relationship of firm attributes, ownership structure and business network on climate change efforts: evidence from Malaysia

Abstract

Climate change has become an increasingly important issue in Malaysia. The main purpose of this study is to examine the relationship between firm characteristics, firm ownership, business networks and climate change mitigation activities in Malaysia. Firms' annual report and corporate social reporting (CSR) content analysis are used to obtain the climate change mitigation activities. Five main themes adopted from Freedman and Jaggi (2005) were measured using the weighted weighting schemes. The 2009 annual reports and CSR of 100 companies from seven industry memberships were selected. Of the 100 companies, 35 were members of the sustainable business networks in Malaysia. Size, profitability, industry membership, government ownership and business network were found to be positively and significantly related to climate change mitigation efforts. Only foreign ownership was found to be negatively related. This research suggests that climate change mitigation efforts from members of sustainability business network are higher compared to those of non-members. This implies that such networks could help to promote better sustainability practices.

Keywords:

• firm characteristics
• ownership structure
• business network
• climate change mitigation
• Malaysia

Notes

1. Politically connected company is defined as at least one of its top officers was or has connection with the head of state, whereas government ownership refers to the percentage of government shareholding in a company (Faccio 2003).