scholarly journals CORPORATE OWNERSHIP STRUCTURE AND FIRM VALUE: EMPIRICAL EVIDENCE OF JSE-LISTED FIRMS, SOUTH AFRICA

2021 ◽  
Vol 9 (2) ◽  
pp. 89-106
Author(s):  
Adeyanju Adebiyi Sunday ◽  
◽  
Farai Kwenda ◽  
Keyword(s):  
South Africa ◽  
Corporate Governance ◽  
Ownership Structure ◽  
Firm Value ◽  
Ownership Concentration ◽  
Corporate Ownership ◽  
Listed Firms ◽  
Governance Practices ◽  
Corporate Ownership Structure ◽  
And Control

This paper examines the relationship between corporate ownership structure and firm value of JSE-listed firms in the phase of the Black Economic Empowerment program in South Africa. Since the end of the apartheid era, corporate governance practices have evolved and the enactment of the BBE Act has altered ownership and control in the South African corporate sector. Using data from 187 firms between 2004 and 2016, we observed that ownership concentration measured by five large shareholders and foreign ownership has a negative impact on firm value proxied with Tobin’s Q and return on assets, while domestic share ownership has a positive relationship with corporate performance. Contrary to the agency theory notion on the role of large shareholders in minimizing losses that arise from the separation of ownership and control and significant foreign investors corporate governance practices in the host countries, the results obtained in this study suggest that local shareholders in the host capital market are important in strengthening corporate governance practices and improve corporate performance. This study contributes to the ownership-firm value relationship literature by offering new evidence on the impact of ownership concentration, foreign ownership, and domestic ownership in an emerging market undergoing transformation through programs addressing its historical inequalities.

Ownership concentration in the Gulf Cooperation Council

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Irma Martinez-Garcia ◽  
Rodrigo Basco ◽  
Silvia Gomez-Anson ◽  
Narjess Boubakri
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Gulf Cooperation Council ◽  
Ownership Concentration ◽  
Content Type ◽  
Listed Firms ◽  
Gcc Countries ◽  
Governance Practices ◽  
Institutional Contexts ◽  
Pyramid Structures

PurposeThis article attempts to answer the following questions: Who ultimately owns firms listed in the Gulf Cooperation Council (GCC) countries? Does ownership structure depend on the institutional context? How does ownership affect firm performance? Do institutional factors influence the ownership–performance relationship?Design/methodology/approachWe apply univariate analyses and generalised methods of moments estimations for a sample of 692 GCC listed firms during 2009–2015.FindingsOur results reveal that corporations are mainly controlled by the state or families, the ownership structure is highly concentrated and pyramid structures are common in the region. Ownership is more concentrated in non-financial than financial firms, and ownership concentration and shareholder identity differ by institutional country setting. Finally, ownership concentration does not influence performance, but formal institutions play a moderating role in the relationship.Practical implicationsAs our findings reveal potential type II agency problems due to ownership concentration, policymakers should raise awareness of professional corporate governance practices and tailor them to GCC countries’ institutional contexts.Social implicationsEven with the introduction of new regulations by some GCC states to protect minority investors and promote corporate governance practices, ownership concentration is a rigid structure, and its use by investors to protect their economic endowment and power is culturally embedded.Originality/valueAlthough previous studies have analysed ownership concentration and large shareholders’ identities across countries, this study fills a research gap investigating this phenomenon in-depth in emerging economies.

scholarly journals Corporate governance, pyramid ownership, and firm value: Evidence from Vietnam

2018 ◽  
Vol 25 (S01) ◽  
pp. 85-102
Author(s):  
Lý Trần Thị Hải ◽  
Đức Nguyễn Kim
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Firm Value ◽  
Least Square ◽  
Family Ownership ◽  
Listed Firms ◽  
Financial Firms ◽  
Least Square Regression ◽  
Governance Practices

This paper examines the relation among corporate governance practices, pyramid ownership structure, and firm value by using a sample of Vietnamese listed firms. Using a sample of 103 non-financial firms listed on HOSE for the period from 2012 to 2014, and employing two-stage least square regression (2SLS) to deal with potential endogeneity, we find that some indicators, commonly adopted as a key components of corporate governance, such as size or independence of board of directors, are imperfect proxies for corporate governance practices. Our results indicate that it is better to employ a corporate governance index (CGI), including 117 criteria developed by Connelly, Limpaphayom, and Nagarajan (2012) since it allows for more comprehensive estimation of corporate governance. More interestingly, our results show that the pyramid ownership plays an important role in the effect of corporate governance on firm value. The results are consistent regardless of whether companies have high or low family ownership.

The Influence of Corporate Ownership Structure and Board Members’ Skills on the Accounting Conservatism: Evidence from Non-Financial Listed Firms in Amman Stock Exchange

2014 ◽  
Vol 4 (1) ◽  
pp. 177
Author(s):  
Dea’a Al-Deen Omar Al-Sraheen ◽  
Faudziah Hanim Bt Fadzil ◽  
Syed Soffian Bin Syed Ismail
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Negative Relationship ◽  
Accounting Conservatism ◽  
Annual Reports ◽  
Board Members ◽  
P Value ◽  
Corporate Ownership ◽  
Listed Firms ◽  
Corporate Ownership Structure

The purpose of the current study is to examine the influence of ownership structure and board members’ skills in the practice of accounting conservatism of Jordanian listed firms. The data were obtained from the annual reports of 116 Jordanian listed firms for year 2011. By using the multiple regression analysis, the results show that the influence of corporate ownership structure and board skills on accounting conservatism were somewhat varied. All variables were a positive relationship with the conservatism with the exception of the board multiple directorship which has negative relationship with conservatism. Five hypotheses were developed and offered in this paper, institutional ownership and board financial expertise were supported, while family ownership, board tenure and board multiple directorships were not supported due to the higher level of P-value compared to 0.05. These results refer that corporate governance plays a vital role in enhancing the level of conservatism and reducing the agency conflict. Further, regulators bodies in Jordan should increase the effectiveness role of corporate governance in Jordanian companies in order to enhance the quality of financial reports. In addition, this study opens up avenues for more studies on accounting conservatism not only in Jordan, but also in other countries where this area of study is lacking.

scholarly journals Ownership structure and corporate governance: What does the data reveal about Saudi listed firms?

2017 ◽  
Vol 14 (4) ◽  
pp. 413-424 ◽  
Author(s):  
Mamdouh Abdulaziz Saleh Al-Faryan ◽  
Everton Dockery
Keyword(s):  
Corporate Governance ◽  
Stock Market ◽  
Firm Size ◽  
Ownership Structure ◽  
Ownership Concentration ◽  
Listed Firms ◽  
Ownership Structures ◽  
Market Instability ◽  
Positive Effect ◽  
Size Variable

In this paper we examine the ownership structure of 169 firms listed on the Saudi Arabian stock market from 2008 to 2014. The analysis uses the testing methodology described by Demsetz and Lehn (1985) to examine the effects of firm and market instability on Saudi ownership structure and additionally, the effect of systematic regulation that imposes constraints on the behaviour of the selected listed firms. We find evidence, for the majority of the ownership structures considered, in favour of the view that firm size, regulation and instability affects ownership structure. The results suggest that the size variable has a positive effect on ownership concentration. Our analysis also shows that instability had some effect on ownership concentration and structure when using the non-linear specification, particularly when using firm specific instability, albeit the effect was stronger when the instability measure was accounting profit returns. Lastly, there is evidence that government-owned firms were mostly affected by regulation while diffused owned firms were affected most by instability than non-government owned firms.

scholarly journals Corporate Governance Mechanisms, Ownership and Firm Value: Evidence from Listed Chinese Firms

2020 ◽  
Vol 8 (2) ◽  
pp. 20 ◽  
Author(s):  
Yusheng Kong ◽  
Takuriramunashe Famba ◽  
Grace Chituku-Dzimiro ◽  
Huaping Sun ◽  
Ophias Kurauone
Keyword(s):  
Corporate Governance ◽  
Firm Value ◽  
Ownership Concentration ◽  
Institutional Setting ◽  
Tobin’S Q ◽  
Governance Mechanism ◽  
Corporate Ownership ◽  
Firm Level ◽  
Tobin's Q ◽  
Negative Effect

This study analyzes corporate ownership as a corporate governance mechanism and its role in creating firm value. Previous research shows that there is no convergence on the firm-value corporate ownership relationship. Most research in this area takes a cross national approach ignoring the uniqueness of each institutional setting particularly those of emerging nations. Using a unique firm level dataset, we investigate how corporate control nature and ownership concentration affect the value of Chinese listed firms. First, non-state owned control is associated with a higher Tobin’s Q while a negative premium is found for state owned. Using the hybrid and the correlated random effects model we confirm a U-shaped non-linear relationship between ownership concentration and Tobin’s Q, implying that firm value first decreases and then increases as block holders own more shares. Further investigation reveals that the negative effect of ownership concentration is weaker when a firm equity nature is non-state owned enterprises (non-SOEs) compared to state-owned enterprises (SOEs). While ownership concentration appears to be an efficient mechanism for corporate governance its effect is weaker for SOEs compared to non-SOEs. The results support privatization of SOEs, sound reforms such as the split share structure reform as crucial for the development of China’s stock market.

scholarly journals Corporate governance and the value of the firm: An empirical analysis of companies listed in the JSE securities exchange of South Africa

2012 ◽  
Vol 10 (1) ◽  
pp. 125-136 ◽  
Author(s):  
Nelson M Waweru
Keyword(s):  
South Africa ◽  
Corporate Governance ◽  
Firm Value ◽  
Audit Quality ◽  
Developing Economies ◽  
Annual Reports ◽  
Executive Directors ◽  
Minority Shareholders ◽  
Corporate Failure ◽  
Governance Practices

This study examines the corporate governance characteristics influencing the value of the value of the firm in South Africa (SA). Corporate governance variables including Block shareholding, Dispensed shareholding, Board size, Proportion of non-executive directors and Audit quality were identified from the corporate governance literature. Using panel data of 247-firm years obtained from the annual reports of the 50 largest companies listed on the JSE Securities Exchange of SA, this study found that block shareholding and the proportion of NEDS as the main corporate governance characteristics influencing the value of the firm in SA. The results of this study are important to the King Committee and other corporate governance regulators in SA, in their effort to improve corporate governance practices and probably minimize corporate failure and protect the wellbeing of the minority shareholders. Furthermore, the study contributes to our understanding of the corporate governance variables affecting firm value in developing economies, especially SA.

scholarly journals The effects of ownership structure, sub-optimal cash holdings and investment inefficiency on dividend policy: evidence from Indonesia

2019 ◽  
Vol 55 (3) ◽  
pp. 857-900
Author(s):  
Abdul Moin ◽  
Yilmaz Guney ◽  
Izidin El Kalak
Keyword(s):  
Ownership Structure ◽  
Payout Policy ◽  
Legal Environment ◽  
Corporate Ownership ◽  
Data Set ◽  
Listed Firms ◽  
Foreign State ◽  
Corporate Ownership Structure ◽  
Minority Interests ◽  
Negative Links

AbstractWe investigate how a firm’s decision to hold excessive cash or to overinvest could influence its dividend payout policy in Indonesia. Additionally, we examine the association between corporate ownership structure and cash dividends. Using a data set of Indonesian listed firms for the period from 1995 to 2014, we find that excessive cash holding (overinvestment) positively (negatively) affects a firm’s likelihood of paying dividends. Also, we find that family, foreign, state and institutional ownership have significantly negative links with dividends, which suggests the signals of expropriation of firms’ wealth by major shareholders. These findings strongly support the expropriation hypothesis that commonly applies to firms with higher level of concentration or to firms in a weak legal environment by which the rights of minority interests are put at risk by large shareholders.

scholarly journals The Effect of Corporate Governance and Ownership Structure on Financial Performance of Listed Companies in Nepal

2019 ◽  
Vol 12 (1) ◽  
pp. 1-18
Author(s):  
Surya Bahadur G. C. ◽  
Ravindra Prasad Baral
Keyword(s):  
Corporate Governance ◽  
Panel Data ◽  
Least Squares ◽  
Ownership Structure ◽  
Stock Exchange ◽  
Listed Companies ◽  
Ownership Concentration ◽  
Data Set ◽  
Listed Firms ◽  
And Performance

The paper attempts to analyze relationships among corporate governance, ownership structure and firm performance in Nepal. The study comprises of panel data set of 25 firms listed at Nepal Stock Exchange (NEPSE) covering a period of five years from 2012 to 2016. The econometric methodology for the study consists primarily of least squares dummy variable (LSDV) model, fixed and random effects panel data models and two-stage least squares (2SLS) model. The study finds bi-directional relationship between corporate governance and performance. Among corporate governance internal mechanisms; smaller board size, higher proportion of independent directors, reducing ownership concentration, improving standards of transparency and disclosure, and designing appropriate director compensation package are important dimensions that listed firms and regulators in Nepal should focus on. Ownership concentration is found to have positive effect on performance; however, it affects corporate governance negatively. This study raises understanding and provides empirical evidence for endogenous relationship between corporate governance and performance and offers support for principal-principal agency relationship. The results of this study lead to several practical implications for listed firms as well as policymakers of Nepal in promoting sound corporate governance practices and codes. For listed companies, the improvement in compliance with a code of corporate governance or voluntary adoption of best practices can provide a means of achieving improved performance.

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