Influence of Family Ownership and Governance on Performance: Evidence from India

2020 ◽  
pp. 097215091988071 ◽  
Author(s):  
Aman Srivastava ◽  
Shikha Bhatia

This study examines how firm performance is impacted by family ownership and governance in an emerging market. Employing a panel data set of listed companies from National Stock Exchange (NSE) of India for the period 2011–2017, this study analyses the relationship between family ownership and firm performance while controlling for variables like impact of external environment and characteristics of firms. The performance of firms is measured by accounting measures of performance and Tobin’s Q. The findings of this study suggest that family ownership and firm performance have a nonlinear relationship and family ownership has a positive impact on firm performance till a certain point and after that it starts affecting firm performance negatively. This study also finds that family involvement in governance positively affects the firm performance.

2021 ◽  
Vol 20 (1) ◽  
pp. 61-83
Author(s):  
Laith Fouad Alshouha ◽  
◽  
Wan Nur Syahida Wan Ismail ◽  
Mohd Zulkifli Mokhtar ◽  
Nik Mohd Norfadzilah Nik Mohd Rashid ◽  
...  

The purpose of the current study was to investigate the relationship between financial structure towards the financial performance of companies listed on Amman stock exchange (ASE) as one of the emerging economies. This paper adopted a panel data set of 88 non-financial companies listed on the ASE over a period of 10 years from 2009 to 2018. According to empirical results that there is significant evidence to support the fact that debt repaying ability (DRAB), managerial ownership (MANOW), and foreign ownership (FOROW) are positively related to firm performance. Otherwise, the findings revealed no evidence to support the impact of the financial structure ability (FSA) towards firm performance. Moreover, the findings support the fact that firm size (SIZ) has a positive impact on firm performance of companies listed on the ASE. On the other hand, (AGE) has a negative impact on firm performance, while (GROWTH) has no impact on firm performance. The current study encourages managers to maintain a good percentage of debt repaying ability and owners to grant shares as managers’ incentives, and also to attract foreign investors. Future studies, should try applying the current study on the financial sector.


2009 ◽  
Vol 23 (1) ◽  
pp. 45-59 ◽  
Author(s):  
Oskar Kowalewski ◽  
Oleksandr Talavera ◽  
Ivan Stetsyuk

This article investigates the influence of family involvement on firm performance in an emerging market economy. Using a panel of 217 Polish companies from 1997 to 2005, the authors find an inverted U-shaped relationship between the share of family ownership and firm performance. The data also reveal that firms with family CEOs are likely to outperform their counterparts that have nonfamily CEOs. The results take into account the endogeneity of family ownership and are robust to a number of specification checks.


2010 ◽  
Vol 11 (1) ◽  
pp. 146-171 ◽  
Author(s):  
Ashi Küçükaslan ◽  
Sadullah Çelik

The leading role that is attributable to economic indicators like consumer confidence has been well documented in the literature for many developed nations. Moreover, the relationship between high frequency financial market data has been a common research topic for world economies. However, there is hardly any study that attempts to search for the possible functional relationship between consumer confidence and financial market variables. This paper is a simple attempt to link these two brands of literature by focusing on the relationship between financial market variables and consumer confidence index before the global crisis has started. We have two distinctive points. First, we derive separate consumer confidence indices for men and women by employing micro‐level consumer confidence data from an emerging market (Turkish CNBC‐e consumer confidence index) for the period of January 2003 ‐ January 2008. Second, employing this data set, we do not only check for the existence of a relationship between consumer confidence and financial market variables (such as interest rates, exchange rates and stock exchange index) but also focus on the possibility of gender response. We find evidence of gender response difference as throughout the period women are more pessimistic than men‐due probably to lower levels of wealth‐and respond less to changes in exchange rates than men‐due probably to lower purchasing power. Santrauka Ekonominiu rodikliu kaip pirkejo pasitikejimo vaidmens svarba yra išsamiai pagrista daugelio išsivys‐čiusiu šaliu literatūroje. Be to, ryšys tarp aukšto finansu. rinkos svyravimo duomenu yra dažna tyrimu tema daugelyje pasaulio šaliu. Tačiau vargu ar galima būtu rasti tyrimu, kuriuose būtu bandoma surasti funkcini ryši tarp pirkejo pasitikejimo ir finansu. rinku rodikliu. Šis straipsnis ‐ tai meginimas susieti šias dvi rūšis, orientuojantis i ryši tarp finansu. rinku rodikliu ir pirkejo pasitikejimo indekso prieš prasi‐dedant pasaulinei krizei. Šiame straipsnyje pabrežti du išskirtiniai bruožai. Pirma, nustatomi atskiri mo‐teru ir vyru pasitikejimo indeksai naudojantis 2003 m. sausio men. ‐ 2008 m. sausio men. laikotarpio augančiu rinku mikrolygmens pirkejo pasitikejimo duomenimis (Turku CNBC‐e pirkejo pasitikejimo indeksas). Antra, naudojantis šia informacija tikrinamas ne tik esamas ryšys tarp pirkejo pasitikejimo ir finansu. rinku rodikliu (pavyzdžiui, palūkanu normos, valiutu kurso, akciju biržos indekso). Buvo rasta akivaizdžiu skirtumu tarp atsakymu, gautu iš skirtingu lyčiu atstovu. Visa laikotarpi moterys buvo pesi‐mistiškesnes nei vyrai, tikriausiai del žemo geroves lygio. Jos mažiau reagavo i valiutu kurso pokyčius nei vyrai del mažesnes perkamosios galios.


2015 ◽  
Vol 9 (2) ◽  
pp. 162-176 ◽  
Author(s):  
Qaiser Rafique Yasser ◽  
Abdullah Al Mamun

Purpose – This paper aims to present an analysis of the association between five categories of concentrated ownership and firm performance in Pakistan. The connection between high ownership concentration and firm performance has attracted much attention, especially in emerging market, yet yielded many inconsistent empirical results. Design/methodology/approach – Karachi Stock Exchange (KSE)-100 Indexed companies listed in KSE from 2007 to 2011 were selected as the sample, and correlation coefficient and regression model were used to inspect the relationship between ownership concentration degree and corporate performance. Findings – It was found that there is no significant association with ownership concentration and accounting-based performance, market-based performance measures and economic profit, in general. Originality/value – The first demonstration that the shareholding proportion of the single largest shareholder is the only variable having positive association with market-based performance measures.


2016 ◽  
Vol 54 (6) ◽  
pp. 1407-1419 ◽  
Author(s):  
Mehmet Nihat Solakoglu ◽  
Nazmi Demir

Purpose – The purpose of this paper is to understand the effect of gender diversity on firm performance and evaluate how that relationship is influenced by some firm-specific factors for firms in an emerging market. Design/methodology/approach – The authors collected firm level financial data and firm level characteristics for the firms listed in BIST100 index of Borsa Istanbul for the period between 2002 and 2006. Due to endogeneity of gender diversity and firm performance, the authors utilize unbalanced panel data with 2SLS specification. To observe the sensitivity of results across measures of performance, three measures of performance, two accounting-based and one market-based, are utilized. Findings – Overall, the authors find some weak evidence that gender diversity impacts firm performance. In particular, the findings imply significant association between gender diversity and firm performance for firms that are targeting local markets, for firms in the financial sector and for firms that are family or block-owned. Moreover, findings are fragile with respect to the measures of diversity and performance selected. Originality/value – Although the relationship between gender diversity and firm performance are investigated several times in the past, there are not many studies that examines the role of firm-specific factors on that relationship. By revealing the factors that are important, this study provides an explanation why the existing literature leads to mixed results.


2014 ◽  
Vol 221 ◽  
pp. 85-104
Author(s):  
Vinh Võ Xuân

The paper aims to investigate the relationship between foreign ownership and firm performance in Vietnam. We use a data set including market and accounting variables of firms listed on Ho Chi Minh Stock Exchange (HOSE) for the period from 2007 to 2012. The results show a significant correlation between foreign ownership and firm performance. The regressions on each level of foreign ownership indicate that foreign ownership is found to be significantly and positively correlated with firm performance when foreigners own between 5% and 20% of shares in firms, while a negative correlation occurs where foreign holdings are more than 20%, specially and considerably negative where the level is more than 40%; and there is no significant relationship between the two variables where foreigners own less than 5% of shares.


2018 ◽  
Vol 30 (3) ◽  
pp. 352-370
Author(s):  
Michelle Li ◽  
Helen Roberts

Purpose This paper aims to examine the relation between CEO board membership and firm performance. Design/methodology/approach This paper investigates the relationship between firm performance and CEO board membership, applying two-stage least squares, propensity score matching and correcting for self-selection bias across a unique sample of publicly listed New Zealand firms that demonstrate a definitive variation in CEO board membership. Findings This study finds that CEO board membership has a positive impact on firm performance, and these benefits are greater for more complex firms. Research limitations/implications Firms with CEOs independent of the board are associated with lower firm performance. The results are consistent with CEO board members providing an important information transfer mechanism to the board, resulting in an increase in average firm performance. This benefit is greater for larger firms with more business segments. Originality/value The paper tests for the impact of CEO board membership using a data set that demonstrates a definitive variation in CEO board membership.


Author(s):  
Pradeep Dharmadasa

Numerous studies have focused on ownership structure and firm performance. In recent years a growing amount of research has recognized the importance of family-controlled firms (FCFs) where ownership concentrates on single individual or family. Despite many important insights, however, significant gaps in the literature remain. Studies have produced divergent findings about the performance of FCFs, leading to calls for further research. Utilizing 151 and 753 firm-years of FCFs drawn from the Colombo Stock Exchange, Sri Lanka, and the Tokyo Stock Exchange, Japan, respectively during 2011-2013, this study examines the relationship between family ownership and firm performance. Regression results show conflicting findings in that family ownership has a positive relationship with firm performance in Japan whereas a negative relationship is found in Sri Lanka. In sum, finding supports that view of the extant studies that family ownership and firm performance have a curvilinear relationship meaning that ownership concentration beyond a certain point likely creates entrenchment and consequently negative effects on performance.


2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Faisal Faisal ◽  
Rizki Ridhasyah ◽  
Haryanto Haryanto

PurposeThis study examines the mediating effect of sustainability disclosure on the relationship between political connections and firm performance from the resource-based view.Design/methodology/approachThe sample of this study was sourced from 888 public companies listed on the Indonesia Stock Exchange (IDX) from 2016 to 2017. Path analysis and Sobel tests were used to determine the mediating effect of sustainability disclosure.FindingsThe results show that political connections have a positive and significant influence on firm performance. Furthermore, sustainability disclosures mediate the relationship between political connections and firm performance.Research limitations/implicationsIn the context of developing countries such as Indonesia, managers can make the existence of parties in politically connected companies as a medium to demonstrate their adherence to external stakeholders through the disclosure of sustainability information.Originality/valueThis study is the first to investigate the mediating effect of sustainability disclosure on the relationship between political connections and firm performance, especially in emerging markets. The parties of the politically connected companies use a social responsibility mechanism as a medium that can sustain their operational sustainability whilst gaining long-term economic benefits.


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