Mediating effect of firm efficiency on the controlling shareholdings firm performance nexus : evidence from public listed firms in Malaysia

This study examines how controlling shareholders infuence frm performance through the mediating role of frm efciency in transforming inputs into outputs. To achieve this objective, it conducts a mediation analysis with 5,000 bootstraps on a dataset of 2,849 frm-year observations of publicly listed frms in Malaysia from 2009 to 2019. The fndings reveal a positive relationship between controlling shareholdings and frm performance, with both total and indirect efects having this positive relationship. Moreover, while controlling shareholdings improve frm performance, frm efciency partially mediates this relationship. Thus, improved frm efciency plays a critical role in understanding the relationship between governance by controlling shareholders and enhanced frm performance. In summary, this study contributes to the existing literature by expanding our understanding of the complex relationship between controlling shareholdings, frm efciency, and frm performance. In addition, the fndings shed light on the importance of indirect channels in shaping organizational outcomes. As such, this study provides a valuable direction for future research in this area.