Owners and employees wages: a question of rent appropriability

2015 ◽  
Vol 53 (2) ◽  
pp. 250-267 ◽  
Author(s):  
Nieves L. L. Díaz-Díaz ◽  
Petra De Saá-Pérez
Keyword(s):  
Human Capital ◽  
Ownership Structure ◽  
Economic Performance ◽  
Capital Investment ◽  
Dynamic Models ◽  
Negative Influence ◽  
State Ownership ◽  
Business Strategies ◽  
Content Type ◽  
The Impact

Purpose – The purpose of this paper is to studuy how the owner identity affects the investment in human capital, measured by wage intensity, as well as the moderating effect of firm’s performance. Design/methodology/approach – A balanced panel of 1,266 Spanish firms that respond to the Survey of Business Strategies for a five-years period was used, which represents a total of 6,330 observations. The dynamic models are estimated using the general method of moments. Findings – The state ownership has a positive and significant effect on specific wage intensity. However, when ownership is in private hands – foreign shareholders, other companies-, the effect is significant but negative. In firms with state ownership, greater economic performance has a negative influence on human capital investment. The results also reveal that while privately owned firms – those with foreign shareholders – tend to invest less in human capital, that tendency diminishes when the firm obtains higher economic performance. Practical implications – Different owners may have different objectives and decision-making horizons, which affect the firm’s investment on human capital. The results obtained regarding the owner identity-wage intensity relationship may serve as a reference for the non-listed firms of continental Europe. The influence of ownership structure on the firm’s decision to invest in human capital is conditioned by the firm’s economic performance. Originality/value – The paper reveals the importance of considering each of the firm’s owners, since their influence on wage intensity differs according to the identity of the owner. There are little empirical papers which analyze the impact of ownership structure on wage intensity, depending on the identity of firm’s owners in a civil context. Moreover, a dynamic panel model is needed due to the firm’s wage intensity does not adjust immediately as their wages are often referring to the previous year rather than being fully negotiated. This paper can be considered a step forward in understanding owner identity characteristics in Spanish-European context.

scholarly journals The impact of ownership structure on financial reporting quality in the east

2017 ◽  
Vol 25 (2) ◽  
pp. 178-197 ◽  
Author(s):  
Qaiser Rafique Yasser ◽  
Abdullah Al Mamun ◽  
Margurite Hook
Keyword(s):  
Earnings Management ◽  
Financial Reporting ◽  
Ownership Structure ◽  
Developing Economies ◽  
Reporting Quality ◽  
State Ownership ◽  
Financial Reporting Quality ◽  
Content Type ◽  
Negatively Associated ◽  
The Impact

Purpose This paper aims to focus mainly on the relationship between ownership structure and earnings management of a developed and two developing economies, and is distinct from prior research. Design/methodology/approach Using a sample of firms from three countries (Australia, Malaysia and Pakistan), the detailed ownership evolutions for the period 2011-2013 were observed. Findings Overall, the authors find that in the East, ownership concentration is negatively associated with financial reporting quality. Individual ownership and group ownership were negatively associated with earnings management in Pakistan, however, not in Malaysia where the same were positively associated. Further, the result of this study indicated that state ownership is negatively associated with firm performance. Among the control variables, it was found that larger firms were negatively correlated with financial reporting, while firms with a larger board size and mature in the maneuver were coupled positively with earnings management. Originality/value The results highlight the highly individualized effects of blockholders and the need for research to further understand the mechanisms through which shareholders impact financial reporting quality.

Regional dynamics of ownership structure and their impact on firm performance and firm valuation

2018 ◽  
Vol 28 (1) ◽  
pp. 129-147 ◽  
Author(s):  
Awais Ali ◽  
Fu Qiang ◽  
Sadia Ashraf
Keyword(s):  
Firm Performance ◽  
Ownership Structure ◽  
Institutional Ownership ◽  
Business Environment ◽  
State Ownership ◽  
Firm Valuation ◽  
Market Valuation ◽  
Content Type ◽  
Geographical Regions ◽  
The Impact

Purpose The purpose of this paper is to analyse the impact of ownership structure on firm valuation and performance across different geographical regions within mainland China. Design/methodology/approach The authors classify China in six geographical regions and use cross-sectional data of companies with A-shares listed on domestic stock exchanges in China for the year-end 2015. Using data from CSMAR and Wind database, they use multivariate regression technique and analytically compare the consistency of relationship between operational variables of ownership structure with corporate performance and evaluation. Findings The authors find that institutional ownership and state ownership negatively affect market valuation throughout various geographical regions of China. Further, in East, Northwest, South Central and Southwestern parts of China, managerial ownership and concentration of shareholding among top ten shareholders positively influence return on equity (ROE). Interestingly, institutional shareholding negatively affects return on assets (ROA), while institutional ownership has a neutral effect on profitability margin in Northeast China. Although in northern part of China, this relationship is slightly positive. In East China region, state ownership and ownership concentration are directly proportional to profitability margin. Practical implications As some of the findings exhibit weak state of market efficiency in some regions, the study may also be useful in identifying arbitrage opportunities across different regions. Moreover, this study suggests that regions with the same business environment and conditions anywhere around the globe invite same or similar ownership structure for better firm performance and valuation. Originality/value The study provides unique understanding of relationship between ownership structure, market valuation and firm performance in various parts of China and will be an addition to the relevant literature. Given a change in company’s ownership structure and considering its region of incorporation, this study will help investment analysts in assessing performance and market valuation of the firm. It will also assist several classes of investors, financial institutions and international businesses in making their investment decisions.

Trust and economic performance

2016 ◽  
Vol 26 (3) ◽  
pp. 371-391 ◽  
Author(s):  
Amna Niazi ◽  
Hamid Hassan
Keyword(s):  
Developing Countries ◽  
Human Capital ◽  
Regression Model ◽  
Economic Performance ◽  
Developed Countries ◽  
Linear Term ◽  
Content Type ◽  
Trust Level ◽  
Non Linear ◽  
The Impact

Purpose Level of trust among the members is considered to be an important component that contributes towards the economic growth in an economy. The purpose of this paper is to examine the effect of trust level along with income per capita, human capital (education level), investment, labor force and political institutions on the economic performance. Design/methodology/approach In this research, panel data as well as cross-country analysis were applied on a sample of 64 countries from 1980 to 2014. Countries were further divided into developed and developing countries to observe the resultant effect of trust on economic performance. To explain the monotonic relationship between trust and economic performance, a non-linear term of trust is added to the regression model to see the impact of change in trust level on economic performance. Findings Empirical results show that there is a positive relation between social trust and economic performance. The result further describes that investment and human capital are leading determinants of economic performance. To explain the monotonic relationship between trust and economic performance, the study adds non-linear term of trust in regression model. The result explains U-shaped path between trust and economic performance in developing countries and inverse U-shaped path in developed countries. Practical implications The study adds valuable insight to the debate of relationship between trust level and economic performance. Business and managers can use this insight while making international strategic decisions regarding foreign direct investments and international expansions. Originality/value This study highlights the importance of trust in developing and developed countries and shows that trust works as a strong binding in holding societies together and better economic performance is not possible, especially in developing countries where there is a lack of trust.

Impact of marine industrial structure on environmental efficiency

2020 ◽  
Vol 31 (1) ◽  
pp. 111-129 ◽  
Author(s):  
Shuhong Wang ◽  
Lu Xing ◽  
Hanxue Chen
Keyword(s):  
Human Capital ◽  
Economic Development ◽  
Ownership Structure ◽  
Industrial Structure ◽  
Environmental Efficiency ◽  
Content Type ◽  
Development Level ◽  
Marine Economy ◽  
Marine Environmental ◽  
Land Economic

Purpose Recently, China has been paying increasing attention to how to improve the efficiency of the marine environment and realize a green and sustainable development of the marine economy. Consequently, the industrial structure is crucial to improving efficiency. The purpose of this paper is to introduce environmental factors into the efficiency analysis framework and explore the relationship between marine industrial structure and marine environmental efficiency. Design/methodology/approach This paper uses marine economic data under the DEA-BBC model to measure the marine environmental efficiency of provinces and cities and classifies them by cluster analysis. Then, the marine industrial structure and marine environmental efficiency are studied by an econometric model with human capital, ownership structure, land economic development level, scientific research input and government intervention degree as control variables. Findings The overall level of marine environmental efficiency is relatively low in China, increasing and then decreasing over the research period. The rationalization of industrial structure and scientific research input have significant promoting effects on marine environmental efficiency, while the degree of government intervention has a significant inhibiting effect. The positive effect of human capital on efficiency depends on whether it can be successfully converted into productivity. The effects of industrial structure advancement, ownership structure and land economic development level of on the marine environmental efficiency are mixed. Originality/value The results provide a theoretical and decision-making basis for China to transform and upgrade its marine industrial structure and sustainably develop the marine economy.

The impact of board composition and ownership structure on dividend payout policy: evidence from Saudi Arabia

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Helmi A. Boshnak
Keyword(s):  
Saudi Arabia ◽  
Ownership Structure ◽  
Dividend Policy ◽  
Payout Policy ◽  
Board Composition ◽  
Dividend Payout ◽  
Content Type ◽  
Listed Firms ◽  
Propensity To Pay ◽  
The Impact

PurposeThis study examines the impact of board composition and ownership structure variables on dividend payout policy in Saudi Arabian firms. In particular, it aims to determine the effect of board size, independence and meeting frequency, in addition to chief executive officer (CEO) duality, and state, institutional, managerial, family, and foreign ownership on both the propensity to pay dividends and dividend per share for Saudi-listed firms over the period 2016–2019.Design/methodology/approachThe paper captures dividend policy with two measures, propensity to pay dividends and dividend per share, and employs a range of regression methods (logistic, probit, ordinary least squares (OLS) and random effects regressions) along with a two-stage least squares (2SLS) model for robustness to account for heteroscedasticity, serial correlation and endogeneity issues. The data set is a large panel of 280 Saudi-listed firms over the period 2016 to 2019.FindingsThe results underline the importance of board composition and the ownership structure in explaining variations in dividend policy across Saudi firms. More specifically, there is a positive relationship between the propensity to pay dividends and board-meeting frequency, institutional ownership, firm profitability and firm age, while the degree of board independence, firm size and leverage exhibit a negative relation. Further, dividend per share is positively related to board meeting frequency, institutional ownership, foreign ownership, firm profitability and age, while it is negatively related to CEO duality, managerial ownership, and firm leverage. There is no evidence that family ownership exerts an impact on dividend payout policy in Saudi firms. The findings of this study support agency, signalling, substitute and outcome theories of dividend policy.Research limitations/implicationsThis study offers an important insight into the board characteristic and ownership structure drivers of dividend policy in the context of an emerging market. Moreover, the study has important implications for firms, managers, investors, policymakers, and regulators in Saudi Arabia.Originality/valueThis paper contributes to the existing literature by providing evidence on four board and five ownership characteristic drivers of dividend policy in Saudi Arabia as an emerging stock market, thereby improving on less comprehensive previous studies. The study recommends that investors consider board composition and ownership structure characteristics of firms as key drivers of dividend policy when making stock investment decisions to inform them about the propensity of investee firms to pay dividends and maintain a given dividend policy.

The impact of employment relationships on firm sustainability

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Francisco Rincon-Roldan ◽  
Alvaro Lopez-Cabrales
Keyword(s):  
Environmental Sustainability ◽  
Chief Executive Officers ◽  
Structural Equation ◽  
Chief Executive ◽  
Negative Influence ◽  
Employment Relationship ◽  
Content Type ◽  
Employment Relationships ◽  
Hr Managers ◽  
The Impact

PurposeThe aim of this study was to analyse the influence of different employment relationships (ERs) on the sustainability results of cooperatives. The authors approached the type of ER comparing the inducements offered by the firm with the contributions that the manager expects from employees. In this way, the authors study how the orientation toward the employment relationship influences the economic, social and environmental sustainability of the firm.Design/methodology/approachThis article presents a theoretical and empirical research model about the relationship between ERs and sustainability. The necessary information was obtained through a questionnaire that was completed by the human resource (HR) managers and chief executive officers (CEOs) of 124 cooperative companies, and structural equation modelling was applied to evaluate the relationships between the proposed constructs, using the partial least squares technique (PLS-SEM).FindingsThe obtained results suggest that mutual investment and overinvestment ERs favour economic, social and environmental sustainability, whereas quasi spot contract and underinvestment ERs have a negative influence on all three types of sustainability. Therefore, it is confirmed that the type of ER adopted can condition the sustainability of the company, either favouring or worsening it.Originality/valueThis work contributes to covering the lack of studies about which ERs impact the sustainability of organisations, and it provides information on the role of ERs in the search for a more sustainable organisation, demonstrating that the type of employment relationship developed by the firm has a relevant impact on its sustainability.

Could CSR improve the financial performance of developing countries’ firms? Analyses of mediating effect of intangible resources

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mohamed Hamdoun ◽  
Mohamed Akli Achabou ◽  
Sihem Dekhili
Keyword(s):  
Developing Countries ◽  
Human Capital ◽  
Financial Performance ◽  
Competitive Advantage ◽  
Mediating Effect ◽  
Social Dimension ◽  
Content Type ◽  
Intangible Resources ◽  
The Impact

Purpose This paper aims to examine the link between corporate social responsibility (CSR) and financial performance in the context of developing countries. More specifically, the mediating role of a firm’s competitive advantage and intangible resources, namely, human capital and reputation are studied. Design/methodology/approach The study considered a sample of 100 Tunisian firms. The analysis makes use of the structural equation modelling method to explore the relationship between CSR and financial performance, by including mediator variables. Findings The results confirm that CSR has no significant direct effect on financial performance. In particular, they indicate that the social dimension of CSR has a negative impact on performance. However, CSR does have a positive impact on competitive advantage via the two intangible resources considered, human capital and company reputation. Research limitations/implications The research fills a gap that occurred in the previous literature. In effect, previous studies focussed only on the direct link between CSR and financial performance. In addition, it enriches the limited literature on CSR strategies in the context of developing countries. However, further studies should explore the opposite relationship, i.e. the impact of financial performance on CSR strategy. In addition, the authors believe that amongst other potential research avenues, it would be interesting to study the moderating role of the activity sector. Practical implications From a practical point of view, this study suggests new applications with respect to the link between CSR and financial performance. To enhance their company’s financial performance, managers need to ensure that intangible resources are managed efficiently. Originality/value The paper contributes to the literature by examining how a firm’s intangible resources mediate between CSR and competitive advantage and how competitive advantage mediates between intangible resources and financial performance. Second originality is related to the study of the link between CSR and the financial performance of business organisations in the context of a developing country.

How does ownership structure affect the financing and dividend decisions of firm?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Tahar Tayachi ◽  
Ahmed Imran Hunjra ◽  
Kirsten Jones ◽  
Rashid Mehmood ◽  
Mamdouh Abdulaziz Saleh Al-Faryan
Keyword(s):  
Ownership Structure ◽  
Dividend Policy ◽  
Generalized Method Of Moments ◽  
Institutional Ownership ◽  
Agency Cost ◽  
Debt Financing ◽  
Policy Implications ◽  
Managerial Ownership ◽  
Content Type ◽  
The Impact

Purpose Ownership structure deals with internal corporate governance mechanism, which plays important role in minimizing conflict of interests between shareholders and management Ownership structure is an important mechanism that influences the value of firm, financing and dividend decisions. This paper aims to examine the impact of the ownership structures, i.e. managerial ownership, institutional ownership on financing and dividend policy. Design/methodology/approach The authors use panel data of manufacturing firms from both developed and developing countries, and the generalized method of moments (GMM) is applied to analyze the results. The authors collect the data from DataStream for the period of 2010 to 2019. Findings The authors find that managerial ownership and ownership concentration have significant and positive effects on debt financing, but they have significant and negative effects on dividend policy. Institutional ownership shows a positive impact on financing decisions and dividend policy for sample firms. Originality/value This study fills the gap by proving the policy implications for both firms and investors, as managers prefer debt financing, but at the same time try to ignore dividend payment. Therefore, investors may not invest in firms with a higher proportion of managerial ownership and may choose to invest more in institutional ownership, which lowers the agency cost.

She-E-Os and innovation: do female CEOs influence firm innovation?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Hafiz Mustansar Javaid ◽  
Qurat Ul Ain ◽  
Antonio Renzi
Keyword(s):  
Financial Constraints ◽  
Ordinary Least Squares ◽  
State Ownership ◽  
Corporate Environment ◽  
Firm Innovation ◽  
Content Type ◽  
Innovation Activities ◽  
Female Ceos ◽  
Innovation Output ◽  
The Impact

PurposeThis paper empirically investigates whether female CEOs (She-E-Os) have an effect on firm innovation among Chinese listed firms based on patent data. This study also delved further by looking at whether the internal corporate environment moderates the effect of female CEOs on innovation, that is, state ownership. Finally, this study investigates an additional test of financial constraints to examine whether financial constraints also moderate the impact of female CEOs on firm innovation.Design/methodology/approachThis study used the data of all A-share listed companies on the Shanghai and Shenzhen stock exchanges for the period from 2008 to 2017. The authors use ordinary least squares regression as a baseline methodology, along with firm-fixed effect, lagged measure of female CEOs, alternative measures of innovation, Heckman two-step model and negative binomial regression to check and control the possible issue of endogeneity.FindingsThe authors’ findings show that CEO gender plays an important role in producing higher levels of innovation output by improving the governance structure. However, female CEOs have no effect on state-owned enterprises' (SOEs) innovation activities, which suggests that the main goal of SOEs is achieving sociopolitical objectives. Furthermore, female CEOs' influence on innovation output is weaker in firms with financial constraints.Social implicationsThis study adds to the emerging global discussion on gender diversity. Many legislative bodies require a quota for women on corporate boards due to gender inequality. This study's findings reinforce such guidelines by emphasizing the economic benefits of including women in top management positions.Originality/valueThis study provides new insights by highlighting the role of female CEOs in increasing firms' innovation activities. Additionally, this study provides evidence on whether the internal corporate environment (state ownership and financial constraints) moderates female CEOs' effect on innovation.

Earnings management and audit quality at Damascus securities exchange: Does managerial ownership matter?

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Zukaa Mardnly ◽  
Zinab Badran ◽  
Sulaiman Mouselli
Keyword(s):  
Earnings Management ◽  
Ownership Structure ◽  
Management Practices ◽  
Audit Quality ◽  
Emerging Market ◽  
Ordinary Least Squares ◽  
Managerial Ownership ◽  
External Audit ◽  
Content Type ◽  
The Impact

Purpose The purpose of this study is to examine the individual and combined effect of managerial ownership and external audit quality, as two control mechanisms, on earnings management. Design/methodology/approach This study applies ordinary least squares estimates on fixed-time effects panel regression model to test the impact of the investigated variables on earnings management for the whole population of banks and insurance companies listed at Damascus Securities Exchange (DSE) during the period from 2011 to 2018. Findings The empirical evidence suggests a negative non-linear relationship between managerial ownership (as proxied by board of directors’ ownership) on earnings management. However, neither audit quality nor the simultaneous effect of the managerial ownership and audit quality (Big 4) affects earnings management. Research limitations/implications DSE is dominated by the financial sector and the number of observations is constrained by the recent establishment of DSE and the small number of firms listed at DSE. In addition, the non-availability of data on executive directors’ and foreign ownerships restrict our ability to uncover the impact of different dimensions of ownership structure on earnings management. Practical implications First, it stimulates investors to purchase stocks in financial firms that enjoy both high managerial ownership, as they seem enjoying higher earnings quality. Second, the findings encourage external auditors to consider the ownership structure when choosing their clients as the financial statements’ quality is affected by this structure. Third, researchers may need to consider the role of managerial ownership when analyzing the determinants of earnings management. Originality/value It fills the gap in the literature, as it investigates the impact of both managerial ownership and audit quality on earnings management in a special conflict context and in an unexplored emerging market of DSE. It suggests that managerial ownership exerts a significant role in controlling earnings management practices when loose regulatory environment combines conflict conditions. However, external audit quality fails to counter earnings management practices when conditions are fierce.

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