scholarly journals Family Involvement in Business and Financial Performance: A Panel Data Analysis

2015 ◽  
Vol 40 (4) ◽  
pp. 395-420 ◽  
Author(s):  
Suveera Gill ◽  
Parmjit Kaur
Keyword(s):  
Financial Performance ◽  
Family Involvement ◽  
Fixed Effects ◽  
Panel Data Analysis ◽  
Performance Measure ◽  
Family Businesses ◽  
Executive Summary ◽  
Cross Sectional ◽  
Dummy Variables ◽  
The Impact

Executive SummaryThe economic backdrop of most nations remains dominated by family businesses. Family control is common in publicly traded Indian companies. Such controlling families often hold large shareholdings and for the most part have representation at the top management level as well as on the board. Consequently, an overarching question that emerges is whether and how family ownership, management, and governance affect corporate performance.This article attempts to discern the relationship between family involvement in business (FIB) and financial performance (FP) of companies included in the S&P BSE 500 Index during the period 2006–2010. In addition, an attempt has been made to examine the difference in accounting and market measures of FP for family companies (FCs) vis-à-vis non-family companies (NFCs). A two-way fixed-effects panel model was used to examine the FIB–FP relationship with fixed effects being dummy variables for each year of the sample and dummy variables for each two-digit National Industrial Classification (NIC) code. Finally, to test for the ‘reverse causation’ between FIB and FP, the instrumental-variable—two-stage least-squares (IV-2SLS) regression was applied.The results confirm that FCs are a predominant form over a number of industries in a large sample, S&P BSE 500 Index. In addition, founding families are often involved in the actual management of the companies. Controlling for company-specific, industry affiliation, and corporate governance variables, the cross-sectional longitudinal analyses show that FIB is associated with superior FP. Furthermore, FP is higher for FCs vis-à-vis NFCs. Based on the market performance measure, FC appear to be better performers with higher outside board representations. On further analysis of the profile of independent directors, it was observed that they had a diverse background and expertise. The impact of firm size and unaffiliated blockholdings on FP was found to be significantly negative. Finally, the estimates from the IV-2SLS were found to be consistent with the preliminary results that FIB is associated with better FP.This article joins the evolving concurrence on the diversity and heterogeneity of family businesses by differentiating between family-owned, family-managed, and family-governed companies. It distinguishes itself from previous studies on the subject, as it uses different typologies based on the extent of FIB as well as presents multiple theoretical perspectives rather than a mono-theoretical view to empirical findings in the present study. Keeping this distinction in perspective is imperative for family business researchers, practitioners, and policymakers.

scholarly journals Analysing the Impact of Financial Ratios on a Company’s Financial Performance

2019 ◽  
Vol 13 (1) ◽  
pp. 1898-1903
Author(s):  
Harendra Nishantha Kariyawasam
Keyword(s):  
Financial Performance ◽  
Firm Size ◽  
Stock Exchange ◽  
Panel Data Analysis ◽  
Financial Ratios ◽  
Current Ratio ◽  
Cross Sectional ◽  
Leverage Ratio ◽  
Sectional Analysis ◽  
The Impact

This study was conducted to analyze the relationship between several chosen financial ratios and the financial performance of companies. Chosen financial indicators were Current Ratio, EPS, Firm size, Leverage Ratio and BV/MV Ratio. Financial performance of the companies was assessed through growth of the net profit margin. Ten companies which were registered in Colombo Stock Exchange which were categorized as diversified holdings were chosen as the sample. Financial data from 2013-2018 were considered for this study. A panel data analysis was used to determine the relationships between the independent variables and the dependent variables with given consideration to time series analysis and cross sectional analysis. According to the results of the study only current ratio, leverage and the firm size had significant relationships with the financial performance of the company. Current ratio and firm size positively impacted the company’s profitability, where as leverage impacted negatively. This study aims to enable informed decision making of the financial actors of an organization to enhance the profitability of the given organization.

scholarly journals Econometric Analysis of the Impact of Propensities on Economic Occurrences: A Macroeconomic Perspective

2012 ◽  
Vol 10 (2) ◽  
pp. 138-154 ◽  
Author(s):  
Mariusz Doszyń
Keyword(s):  
Spatial Data ◽  
Fixed Effects ◽  
Classical Model ◽  
Econometric Analysis ◽  
Dummy Variables ◽  
Macroeconomic Variables ◽  
Current State ◽  
Famous Book ◽  
Direct Models ◽  
The Impact

Econometric Analysis of the Impact of Propensities on Economic Occurrences: A Macroeconomic PerspectiveThe main aim of this article was the specification of problems connected with analysis of impact of human propensities on economic occurrences and also a proposition of econometric tools enabling the identification of this impact. According to the meaning of propensities in economics the current state of knowledge is mostly an effect of considerations presented by J.M. Keynes in his famous book "The General Theory of Employment, Interest and Money" where J.M. Keynes proposed such economic categories as the average and marginal propensities. One of the goals of the presented deliberations was to specify problems related with economic theory of propensities. Such propensities as a propensity to consume, to save, to invest and thesaurisation were particularly carefully analysed. The impact of these propensities on basic macroeconomic variables was considered with respect to the classical model, the neoclassical Solow-Swan model and theIS-LMscheme. In case of spatial data the effects of the impact of propensities could be analysed by means of models with dummy variables showing presence of given propensities. A procedure enabling the construction of such variables was proposed. In case of time series, conceptions delivered by the integration and cointegration theory could be applied. Especially such models as VAR and VECM could be useful. Models for panel data enable direct (models with fixed effects) or indirect (models with random effects) consideration of the impact of propensities on the analysed processes.

scholarly journals Corporate Governance And Its Effect On Firm Performance In An Emerging Economy

2022 ◽  
Vol 2 (3) ◽  
pp. 281-291
Author(s):  
Langa Esmael KAREM ◽  
Hawkar Anwer HAMAD ◽  
Hakar Abubakir BAYZ ◽  
Naji Afrasyaw FATAH ◽  
Diary Jalal ALI ◽  
...  
Keyword(s):  
Financial Performance ◽  
Business Processes ◽  
Board Members ◽  
Board Composition ◽  
Return On Assets ◽  
Board Size ◽  
Cross Sectional ◽  
The Impact ◽  
The Relationship ◽  
Board Ownership

Having a board of directors is very important to ensure the smooth running of business processes and have an impact on the company's financial performance. This study to determine the impact of board characteristics namely board size, board ownership and board composition on the financial performance of organizations as measured by Return on Assets. The study employed a descriptive-explanatory research design based on a cross-sectional approach. Correlation and regression analyses were conducted to determine the depth and extent of the relationship between the variables. The study revealed a positive and significant association between the board size and financial performance on an average of 9 board members. Board composition revealed that having more external directors had no effect on the financial performance, it neither increased it nor decreased it, leading to the rejection of the hypothesis. On the other hand, board ownership was found to be beneficial in terms of having directors as owners of the business, corroborating the Stakeholder Theory. The studies showed that there was still a need to select board members with caution striking a balance between the number of directors as well as their composition to ensure that the organization reaps maximum benefits from the board.

scholarly journals Impact of the Ownership Structure on the Financial Performance of Banks: Comparative Study between Conventional and Islamic Banks

2019 ◽  
Vol 4 (2) ◽  
pp. 50-63
Author(s):  
Achraf Haddad ◽  
Anis El Ammari ◽  
Abdelfattah Bouri
Keyword(s):  
Financial Performance ◽  
Ownership Structure ◽  
Least Squares Method ◽  
Conflicts Of Interest ◽  
Positive Impact ◽  
Ordinary Least Squares ◽  
Performance Measure ◽  
Islamic Banks ◽  
Two Samples ◽  
The Impact

According to the literature of corporate governance, ownership structure is advanced as a non-dissociable mechanism of control intended to follow the stakeholders and especially used by shareholders to monitor the conflicts of interest and the opportunistic behavior of managers. Several previous studies have focused on the impact of ownership structure on financial performance separately in conventional or in Islamic banks. However, the comparative studies between these two impacts are non-existent. In this research, we compared the impacts of this governance mechanism on the financial performance in the two types of banks by using the Ordinary Least Squares method. Data relating to financial performance and ownership structure of banks come from 16 countries. Two samples were collected: the first one included 63 conventional banks, whereas the second one integrated 63 Islamic banks whose data are available over the period (2010-2018). Panel results showed that partial effect of each determinant of ownership structure on each measure of financial performance varied from one banks’ type to another and from one performance measure to another. Besides, the reconciliation of similar models revealed many differences between the same impacts’ signs. Therefore, we concluded that in both banks’ types the ownership structure has a positive impact on the financial performance. While, the negative part of the same impact is less significant in Islamic banks. JEL Classification:  F33, G20, G21, G24, G30.

scholarly journals IMPACT OF HUMAN CAPITAL DEVELOPMENT ON PRODUCTIVITY GROWTH IN EU MEMBER STATES

2018 ◽  
Vol 16 (0) ◽  
pp. 1-12 ◽  
Author(s):  
Alma Mačiulytė-Šniukienė ◽  
Kristina Matuzevičiūtė
Keyword(s):  
Human Capital ◽  
Fixed Effects ◽  
Panel Data Analysis ◽  
Labour Productivity ◽  
Ordinary Least Squares ◽  
Fixed Effects Model ◽  
Education Expenditure ◽  
Member States ◽  
Eu Member States ◽  
The Impact

In this research, we investigate the impact of human capital on labour productivity in European Union member states using panel data analysis. Results of the paper are estimated using the Pooled ordinary least squares (OLS) and Fixed effects model (FEM). The results show that human capital is positively significant in improving the growth of labour productivity in the EU. Our estimates also suggest that the impact occurs after three times lags in case of education expenditure.

Intellectual capital efficiency and market-based financial performance: Evidence from listed conglomerate companies

2021 ◽  
Vol 2 (2) ◽  
pp. 31-42
Author(s):  
Eniola Ayisat Sulaiman ◽  
Abubakar Sadiq Kasum ◽  
Wasiu Ajani Musa
Keyword(s):  
Financial Performance ◽  
Intellectual Capital ◽  
Fixed Effects ◽  
Value Added ◽  
Secondary Data ◽  
Lagrangian Multiplier ◽  
Fixed Effects Model ◽  
Analysis Technique ◽  
Capital Efficiency ◽  
The Impact

Having observed the rate at which dissimilarity occurs between market and book value, and management ignorance concerning the impact intellectual capital disclosure has on companies’ values spurred the interest to probe the association between the efficiency of value-added intellectual coefficient (VAIC) and market-based financial performance of listed Nigerian conglomerate companies. To accomplish the purpose of this study, secondary data were employed and extracted from annual audited reports of listed conglomerate companies in Nigeria from the period of 2010–2018. The data obtained were subjected to static panel data regression analysis technique. The random-effects model was adopted because the empirical result from Breusch and Pagan Lagrangian multiplier (BP-LM) and Hausman tests chose it over the fixed-effects model to produce better results. This study revealed that the value-added efficiency of capital employed (VACA), value-added efficiency of human capital (VAHU), and value-added efficiency of structural capital (STVA) are the drivers of intellectual capital in the conglomerate sector. This study concluded that elements of intellectual capital have a strong power on market-based financial performance. This study recommends that information on intellectual capital components should be reported in ways they deem fit by developing a model of intellectual capital disclosure that complies with the International Accounting Standard Board (IASB)

Impact of Information and Communication Readiness on the Tourism Industry

2021 ◽  
pp. 186-201
Author(s):  
Woon Leong Lin ◽  
Bee Lian Song
Keyword(s):  
Fixed Effects ◽  
Panel Data Analysis ◽  
Tourism Industry ◽  
Policy Effects ◽  
Travel And Tourism ◽  
Economic Progress ◽  
The World ◽  
Information And Communication ◽  
World Economic ◽  
The Impact

This study examines the impact of ICT readiness on the tourism industry and how it leads to growing competitiveness by deploying three-panel data analysis techniques (pooled OLS, fixed effects, dynamic GMM) with 177 nations for the period 2011 to 2019. ICT readiness is gauged using the World Economic Forum's Travel and Tourism Competitiveness Index, whereas tourism's contribution towards economic progress is gauged by overall international traveler arrival. The observations indicate that ICT readiness causes a statistically significant effect on tourism's role in economic progress. Tourism policy effects and guidelines for future works are discussed as well.

Impact of Financial Risks on the Profitability of Systematically Important Banks in Nigeria

Paradigm ◽  
2019 ◽  
Vol 23 (2) ◽  
pp. 117-129
Author(s):  
Olufemi Adewale Aluko ◽  
Funso Tajudeen Kolapo ◽  
Patrick Olufemi Adeyeye ◽  
Patrick Olajide Oladele
Keyword(s):  
Interest Rate ◽  
Fixed Effects ◽  
Positive Impact ◽  
Financial Risks ◽  
Cross Sectional ◽  
Bank Profitability ◽  
Alternative Measures ◽  
Cross Sectional Dependence ◽  
Fixed Effects Regression ◽  
The Impact

This study examines the impact of financial risks in form of credit, interest rate and liquidity risk on the profitability of systematically important banks in Nigeria over the period from 2010 to 2016. The fixed effects regression model is estimated with Driscoll–Kraay standard errors in order to produce results that are robust to heteroscedaticity, autocorrelation, cross-sectional dependence and temporal dependence. After controlling for some bank-specific, industry-specific, macroeconomic and institutional factors, the empirical results show that credit and liquidity risks have a positive impact on bank profitability while interest rate does not have an impact. The results are robust to alternative measures of profitability.

Globalization and health: An empirical investigation

2019 ◽  
Vol 19 (3) ◽  
pp. 207-224 ◽  
Author(s):  
Vishalkumar J Jani ◽  
Nisarg A Joshi ◽  
Dhyani J Mehta
Keyword(s):  
Health Status ◽  
Panel Data ◽  
Fixed Effects ◽  
Panel Data Analysis ◽  
Health Indicators ◽  
Developed Countries ◽  
Social Dimension ◽  
Three Dimensions ◽  
Infant Mortality Rate ◽  
The Impact

This article empirically examines the impact of globalization on the health status of countries by using panel data. Unlike previous studies, it has attempted to use three different dimensions of globalization and estimate their impact on health status measured by infant mortality rate and life expectancy. It also introduces an initial level of development status as an explanatory variable and found that it has an important role. The fixed effects panel data analysis shows that globalization has a positive impact on the health indicators. Out of the three dimensions of globalization, namely, economic, social and political, the first one has the highest influence on health for the less developed countries. However, as one moves up the ladder of development, social dimension becomes more important. Moreover, the pace of improvement in health indicators is faster in developed countries, indicating a divergence between the developed and the underdeveloped world.

Changes in Hospital Financing and Organization and Their Impact on Hospital Performance

2019 ◽  
Author(s):  
Jonas Schreyögg
Keyword(s):  
Financial Performance ◽  
Financial Incentives ◽  
Hospital Performance ◽  
Unintended Effects ◽  
Natural Experiments ◽  
Cross Sectional ◽  
Trade Offs ◽  
Wide Range ◽  
Improve Hospital ◽  
The Impact

Since the 1980s policymakers have identified a wide range of policy interventions to improve hospital performance. Some of these have been initiated at the level of government, whereas others have taken the form of decisions made by individual hospitals but have been guided by regulatory or financial incentives. Studies investigating the impact that some of the most important of these interventions have had on hospital performance can be grouped into four different research streams. Among the research streams, the strongest evidence exists for the effects of privatization. Studies on this topic use longitudinal designs with control groups and have found robust increases in efficiency and financial performance. Evidence on the entry of hospitals into health systems and the effects of this on efficiency is similarly strong. Although the other three streams of research also contain well-conducted studies with valuable findings, they are predominantly cross-sectional in design and therefore cannot establish causation. While the effects of introducing DRG-based hospital payments and of specialization are largely unclear, vertical and horizontal cooperation probably have a positive effect on efficiency and financial performance. Lastly, the drivers of improved efficiency or financial performance are very different depending on the reform or intervention being investigated; however, reductions in the number of staff and improved bargaining power in purchasing stand out as being of particular importance. Several promising avenues for future investigation are identified. One of these is situated within a new area of research examining the link between changes in the prices of treatments and hospitals’ responses. As there is evidence of unintended effects, future studies should attempt to distinguish between changes in hospitals’ responses at the intensive margin (e.g., upcoding) versus the extensive margin (e.g., increase in admissions). When looking at the effects of entering into a health system and of privatizations, there is still considerable need for research. With privatizations, in particular, the underlying processes are not yet fully understood, and the potential trade-offs between increases in performance and changes in the quality of care have not been sufficiently examined. Lastly, there is substantial need for further papers in the areas of multi-institutional arrangements and cooperation, as well as specialization. In both research streams, natural experiments carried out using program evaluation design are lacking. One of the main challenges here, however, is that cooperation and specialization cannot be directly observed but rather must be constructed based on survey or administrative data.

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