scholarly journals Market liquidity and capital structure: Does it really matter for Vietnam’s family ownership?

2021 ◽  
Author(s):  
Kien Son Nguyen ◽  
Van Thi Hong Nguyen ◽  
Hang Thu Le
Keyword(s):  
Capital Structure ◽  
Dynamic Structure ◽  
Market Liquidity ◽  
Family Ownership ◽  
Stock Liquidity ◽  
Listed Firms ◽  
The Family ◽  
Dual Class ◽  
The Relationship ◽  
Negative Link

Abstract This study analyzes the moderating effect of different kinds of family ownership on the relationship between market liquidity and capital structure. Using a new sample of 315 Vietnam listed firms for five years, we figured out a significant negative link between stock market liquidity and capital structure. However, it is well noted that there is an adverse reaction from family ownership where the higher the dual-class control and dynamic structure mechanism, the more control-enhancement the family ownership will be, which leads to a higher risk aversion regarding debt-bankruptcy. In this sense, corporate leverage had responded positively to an increase in stock liquidity in the case of family ownership intervention.

scholarly journals Family Ownership and Dividend Policy: Empirical Evidence from Malaysia

2018 ◽  
Vol 13 (5) ◽  
pp. 112 ◽  
Author(s):  
Vasanthan Subramaniam
Keyword(s):  
Family Firms ◽  
Least Square ◽  
Family Ownership ◽  
Corporate Structure ◽  
Listed Firms ◽  
Ordinary Least Square ◽  
Regression Methods ◽  
Agency Conflict ◽  
The Family ◽  
The Relationship

The objective of this study is to investigate the relationship between family ownership and dividend in Malaysian publicly listed firms. Malaysia served as a distinctive country to conduct this research as the corporate structure is largely characterised as family owned and the corporate firms are highly involved in high and stable dividends. The study uses data from 712 firms over the period of five (5) years from the year 2010 to 2014. Adjusted ordinary least square (OLS) regression methods are employed to analyse the data used in the study. Based on the results, family ownership is seen to have a significant positive relationship with dividends in Malaysia, especially in family firms. The finding has supported the reputational view of dividend, mitigation of agency conflict and dividends as the source of income for the family shareholders. However, the expropriation motive of the controlling family shareholders can still be relevant as high dividends were certainly paid to themselves as they are the majority shareholders in the firm. The contribution of the study lies in the behaviour of the controlling family shareholders in both family and non-family firms in Malaysia. The actual motives of them in relation to the enhancement of the shareholders’ wealth can be revealed through the findings of this study.

scholarly journals Capital structure, capital investment and profitability among Malaysian listed firms

2018 ◽  
Vol 7 (4.9) ◽  
pp. 14
Author(s):  
Yamunah Vaicondam ◽  
Ramakrishnan Ramakrishnan
Keyword(s):  
Capital Structure ◽  
Capital Investment ◽  
Moderating Effect ◽  
The Other ◽  
Capital Investments ◽  
Significant Positive Effect ◽  
Listed Firms ◽  
Empire Building ◽  
The Relationship ◽  
Positive Effect

Capital investments are referred as a critical managerial decision on firm's fixed asset for generating profitability. However, the empirical finding shows that not every capital investment has a significant positive effect on profitability. Literature indicates mixed results of examining the capital investment relationship with firm's profitability, which vary in respects to the debt structure. On the other hand, strong government reinforcement has pushed Malaysia up as one of the top ten countries with robust private capital investment in the year 2004. Since the capital investments are typically irreversible and hypothesized as profit generator, the first aim of this study is to examine the effect of the capital investment on the firm's profitability across firms and sectors. The second aim is to examine the moderating effect of capital structure on the relationship between capital investment and profitability across firms and sectors. This study utilized pooled ordinary least squares and fixed effect analysis across 708 non-financial Malaysian listed firms. The unbalanced datasets for the period 2001 to 2015 were employed to check the robustness of these results. This study suggested that capital investment has a strong significant positive effect on profitability measurements across Malaysian listed firms in non-financial sectors. On the other hand, the significant negative moderating effect of capital structure on the relationship between capital investment and return on capital across Malaysian listed firms reflected the perspective of empire building theory. In addition, the independent sample test engaged across sectors affirmed that moderating effect of capital structure are different across sectors. Thus, this study concluded the existence of moderating effect of capital structure on the relationship between capital investment and profitability. This study addressed the knowledge gap on the moderating effect of capital structure based on empire building theory.  

scholarly journals Family ownership, premiums paid and performance: Evidence from corporate take-overs in Malaysia

2007 ◽  
Vol 4 (2) ◽  
pp. 89-99 ◽  
Author(s):  
Saw-Imm Song ◽  
Ruhani Ali ◽  
Subramaniam Pillay
Keyword(s):  
Interaction Effect ◽  
Agency Problem ◽  
Developed Countries ◽  
Curvilinear Relationship ◽  
Family Ownership ◽  
Listed Firms ◽  
And Performance ◽  
The Relationship

This study examines the relationship between ownership identity of the largest shareholders, premiums paid and take-over performance, with reference to 63 large acquisitions by Malaysian public listed firms from 1990 to 1999. It is found that the premiums paid are much higher than those in developed countries. It has a curvilinear relationship with take-over performance. At lower to moderate levels of premiums, it improves post-take-over performance while excessive premium drags down the performance of the bidding firms. The finding shows that there is an interaction effect between family ownership and premiums paid which has contributed positively to the post-take-over performance. The evidence suggests that family ownership mitigates agency problem in corporate take-overs

scholarly journals How is firm performance related to family ownership in Malaysia and does board independence moderate the relationship?

2015 ◽  
Vol 11 (2) ◽  
pp. 21-35 ◽  
Author(s):  
Sin-Huei Ng ◽  
Tze San Ong ◽  
Boon Heng Teh ◽  
Wei Ni Soh
Keyword(s):  
Firm Performance ◽  
Agency Theory ◽  
Family Ownership ◽  
Board Independence ◽  
Moderating Effects ◽  
Dominant Party ◽  
The Family ◽  
And Control ◽  
Relationship Of ◽  
The Relationship

This paper explores whether the performance of publicly-listed family-controlled firms in Malaysia is related to the extent of the families’ ownership. It also explores whether there are any moderating effects from the various attributes of board independence on the ownership-performance relationship of these firms. The findings indicate that increasing families’ ownership is related to better firm performance under the condition that the families do not have absolute ownership and control over their firms. However, giving more control via majority ownership that causes the families to become the only dominant party might enhance their ability to expropriate and cause firm performance to deteriorate. Therefore, proposal to increase ownership as a mean to reduce the classical agency-theory problems should be caveated under the principal-principal perspective. It is also found that the various board independence attributes do not exhibit any moderating influence on the family ownership-firm performance relationship. This finding may indicate the powerlessness of the boards of director in Malaysia when encountered with the influential controlling families whom the directorship tenures and opportunities of the non-family directors depend on. Decisions made by the controlling families which have bearing on firm performance may not have been effectively counter checked by the boards due to the lack of truly independent nature of the boards

scholarly journals Capital Structure and Firm Performance in Nigerian-Listed Companies

2016 ◽  
Vol 8 (3(J)) ◽  
pp. 54-74 ◽  
Author(s):  
Matthew Adeolu Abata ◽  
Stephen Oseko Migiro
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Negative Relationship ◽  
Debt Financing ◽  
Descriptive Statistics ◽  
The Other ◽  
Listed Firms ◽  
Business Failures ◽  
The Relationship

a number of business failures have not been reported in Nigeria arising from inability to payback nor does service debts .This paper empirically investigate the relationship between capital structure and firm performance in the Nigerian listed firms. A sample of 30listed firms out of a population of 173 were examined from 2005 to 2014 using multiple regression tools. Two hypotheses were formulated and tested using descriptive statistics and an econometric panel data technique to analyze the gathered data. An insignificantly negative correlation was found between financial leverage and ROA on one hand and a significantly negative relationship between debt/equity mix and ROE on the other hand. It is therefore recommended that firms should use long term liabilities to finance firm’s activities and mix debt/equity appropriately by ensuring that debt financing ratio is lower to enhance corporate performance and survival.

scholarly journals Impact of Capital Structure on Profitability:An empirical analysis of listed firms in India

2018 ◽  
Vol 7 (2) ◽  
pp. 1-6
Author(s):  
Atif Ghayas ◽  
Javaid Akhter
Keyword(s):  
Capital Structure ◽  
Stock Exchange ◽  
Short Term ◽  
Return On Equity ◽  
Listed Firms ◽  
Relationship Capital ◽  
The Impact ◽  
The Relationship ◽  
Positive Effect

This study aims to empirically examine and analyze the impact of capital structure decision on the firm’s profitability by using a sample of 35 Indian pharmaceutical companies listed on Bombay Stock Exchange (BSE) during the period of 5 years from 2012 to 2016. Regression Analysis is used to measure the extent and nature of the relationship. Capital structure variables used in the study are ratio of long-term debt to total assets (LDA), ratio of short-term debt to total assets (SDA) and ratio of Total debt to total assets (DA) while profitability has been measure by Return on Equity (ROE). Firms Size (SIZE)and Salesgrowth(GROW) are also used as control variables. Results reveal a positive effect of SDA and DA on ROE, while a weak-to-no effect was found of LDA on ROE.

scholarly journals Effect of Ownership Structure on Corporate Diversification of Listed Firms in Kenya

2019 ◽  
Vol 2 (5) ◽  
pp. 29-46
Author(s):  
Peninah Jepkogei Tanui ◽  
Josephat Cheboi Yegon ◽  
Ronald Bonuke
Keyword(s):  
Capital Structure ◽  
Institutional Ownership ◽  
Target Population ◽  
Foreign Ownership ◽  
Moderating Effect ◽  
Corporate Diversification ◽  
Listed Firms ◽  
Low Levels ◽  
The Relationship

Purpose - This paper aimed to examine the moderating role of capital structure in the relationship between institutional and foreign ownerships on corporate diversification of listed firms at the Nairobi Securities Exchange, Kenya. Design/Methodology - The target population comprised of all the 65 listed firms at Nairobi Securities Exchange in Kenya. However, the inclusion criteria were based on all firms listed at the NSE from 2003 to 2017. Findings - Capital structure significantly moderated the relationship between institutional ownership and corporate diversification. However, there was a statistically insignificant moderating effect of capital structure in the relationship between foreign ownership and corporate diversification. Practical Implications - As to increase diversification, listed firms are suggested to have low levels of capital structure and institutional ownership. Furthermore, low levels of foreign ownership and high capital structure is vital in attaining high diversification levels. Originality - The study contribution is the moderating effect of capital structure in institutional ownership - corporate diversification linkage.

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