scholarly journals Information asymmetries, family ownership and divestiture financial performance: Evidence from Western European countries

2014 ◽  
Vol 11 (4) ◽  
pp. 43-57 ◽  
Author(s):  
Enzo Peruffo ◽  
Raffaele Oriani ◽  
Alessandra Perri
Keyword(s):  
Financial Performance ◽  
Information Asymmetry ◽  
Agency Theory ◽  
Information Economics ◽  
European Countries ◽  
Family Ownership ◽  
Information Asymmetries ◽  
Stock Market Reaction ◽  
Western European ◽  
The Relationship

Compared to other transactions, corporate divestiture is characterized by greater ambiguity and lower transparency, which can be detrimental to stock market reaction. Drawing upon agency theory and information economics literature, this paper examines the relationship between information asymmetries, family ownership and the divestiture financial performance in Western European countries. Based on a sample of 115 Western European divestiture transactions carried out between 1996 and 2010, we find support for the assertion that information asymmetry impacts divestiture financial performance. We also show that the influence of information asymmetries is moderated by family ownership, which acts as a signal of divestiture quality.

scholarly journals RELATIONSHIP BETWEEN FAMILY OWNERSHIP, AGENCY COSTS TOWARDS FINANCIAL PERFORMANCE AND BUSINESS STRATEGY AS MEDIATION

2018 ◽  
Vol 19 (0) ◽  
pp. 49-58
Author(s):  
Enni Savitri
Keyword(s):  
Financial Performance ◽  
Business Strategy ◽  
Agency Costs ◽  
Stock Exchange ◽  
Partial Least Square ◽  
Least Square ◽  
Business Strategies ◽  
Family Ownership ◽  
Manufacturing Companies ◽  
The Relationship

This study investigates the relationship between family ownership, agency costs, financial performance, and companies’ business strategies. The targeted population of this study were all 143 manufacturing companies listed on the Indonesia Stock Exchange (IDX) during 2007–2014. About 31% (45) of these manufacturing companies are family companies. The hypotheses were tested using the partial least-square (PLS) method. Our findings reveal that the companies’ business strategies are not affected by the family ownership. Family ownership and business strategies influence companies’ financial performance. Agency costs influence business strategy and financial performance, and this shows that agency costs contribute to both the increase and decrease of financial performance. Business strategy mediates the relationship between family ownership and financial performance. This shows that family companies do not concentrate on financial goals but rather on the sustainability. Business strategy influences the relationship between agency costs and financial performance. This shows that funds can be redistributed in the course of business strategy planning, which will, in turn, improve the company’s development.

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 Can Family Ownership Strengthen the Relationship Between Intellectual Capital and Performance in ASEAN High-Tech Firms?

2021 ◽  
Vol 22 (3) ◽  
pp. 1102-1122
Author(s):  
Bima Cinintya Pratama ◽  
Maulida Nurul Innayah
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Positive Relationship ◽  
Random Effect ◽  
Market Performance ◽  
High Tech ◽  
Family Ownership ◽  
Effect Regression ◽  
The Relationship

This study investigates the positive relationship between intellectual capital and firm performance. It examines whether family ownership can strengthen the relationship between intellectual capital and firm performance of firms in high-technology industries in ASEAN. The data was collected from the BvD OSIRIS database and company annual reports from 2008-2014 and conducted on five countries in ASEAN, namely Indonesia, Malaysia, Philippines, Singapore, and Thailand. The final sample used in this study consists of a total of 1,310 observations. This study uses panel data regression model analysis, i.e. fixed effect regression and random effect regression. The results showed that intellectual capital has a positive relationship with financial performance. The result proved the role of intellectual capital in increasing firm finances and its importance as one of the primary resources in competing in the AEC challenges and as the firm's primary driver for the firm's success. It is not found in the relationship between intellectual capital and market performance. In the interaction relationship, the result is contrary to the alignment effect that becomes our previous prediction. The result is consistent with the entrenchment effect and indicates that family ownership can weaken the relationship between intellectual capital and financial performance. There is no evidence about the relationship between the interaction of intellectual capital and family ownership on market performance.

scholarly journals PENGARUH TANGGUNG JAWAB DAN LOCUS OF CONTROL DALAM KEPUTUSAN INVESTASI POURING GOOD MONEY AFTER BAD

2017 ◽  
Vol 10 (4) ◽  
pp. 537
Author(s):  
Jesica Handoko
Keyword(s):  
Locus Of Control ◽  
Information Asymmetry ◽  
Agency Theory ◽  
Undergraduate Students ◽  
Investment Decision ◽  
Control Variable ◽  
Corporate Investment ◽  
Personal Commitment ◽  
Alternative Hypotheses ◽  
The Relationship

Sometimes, a manager (agent) must make  difficult decisions like to decide whether to continue or to commit resources to a risky and highly uncertain project (to escalate it), or to abandon it, after a great deal of corporate investment, and possibly personal commitment and reputation, have already been used up. In agency theory perspectives, this decision could be done when there must be a condition of information asymmetry, and an incentive for manager to shirk. This study try to strenghten manager’s responsibility variable and to  explore locus of control variable in the relationship with pouring good money after bad investment decision. 95 undergraduate students participate in this study and not found significant results for the alternative hypotheses. It’s  suggested  that  undergraduate students weren’t ready for investment decision researchs, especially when dealing with risky projects, because of their lack of knowledge and experiences.

scholarly journals What unites the voter bases of populist parties? Comparing the electorates of 15 populist parties

2017 ◽  
Vol 10 (3) ◽  
pp. 351-368 ◽  
Author(s):  
Matthijs Rooduijn
Keyword(s):  
Direct Democracy ◽  
Political Trust ◽  
European Countries ◽  
Organizational Forms ◽  
The People ◽  
Low Levels ◽  
Western European ◽  
Increasing Knowledge ◽  
The Relationship

Various scholars have argued and demonstrated that Western European populist parties have something in common. Although these parties adhere to various ideologies and employ different organizational forms and political styles, they all endorse a similar set of ideas concerning the relationship between the people and the elite. Yet despite our increasing knowledge about these parties, so far we know only very little about populist voters. Do the voter bases of populist parties also have something in common? To answer that question, I focus on the electorates of 15 prototypical populist parties from 11 Western European countries. I show that, in contrast with widely held beliefs, the electorates of populist parties do not always consist of individuals who are more likely to be ‘losers of globalization’ with Eurosceptic attitudes, low levels of political trust, and preferences for (more) direct democracy. This suggests that ‘the’ populist voter does not exist.

scholarly journals It's Not Just a Visit: Receiving Government Officials’ Visits and Firm Performance in China

2016 ◽  
Vol 12 (3) ◽  
pp. 577-604 ◽  
Author(s):  
Weiwen Li ◽  
Eric W. K. Tsang ◽  
Danglun Luo ◽  
Qianwei Ying
Keyword(s):  
Financial Performance ◽  
Transaction Costs ◽  
Information Asymmetry ◽  
Emerging Economies ◽  
Positive Impact ◽  
Manufacturing Firms ◽  
Specific Form ◽  
Government Officials ◽  
Ex Post ◽  
The Relationship

ABSTRACTDrawing upon signaling theory, we propose that a specific form of non-market action, receiving government officials’ visits, reduces transaction costs between firms and their potential exchange partners and thus contributes to firms’ competitive advantage in China. We also contend that severity of information asymmetry and availability of alternative ways of reducing transaction costs moderate the relationship between receiving government officials’ visits and company financial performance in opposite directions. The former factor increases the ex ante value of receiving government officials’ visits and strengthens its positive impact on financial performance, while the latter factor decreases the ex post value of receiving government officials’ visits and reduces its positive impact. Our conceptual framework is supported by analyses that draw on a sample of listed manufacturing firms in China. Our study contributes to a more in-depth understanding of non-market actions in emerging economies, their contingencies, and their performance implications.

Product and Market Diversification and the Stock Market Response to Business Combinations

2006 ◽  
pp. 216-241
Author(s):  
Pablo Sanchez-Lorda ◽  
Esteban Garcia-Canal
Keyword(s):  
Stock Market ◽  
Information Asymmetry ◽  
Strategic Alliances ◽  
Market Reaction ◽  
Abnormal Returns ◽  
Business Combinations ◽  
Stock Market Reaction ◽  
Resource Complementarity ◽  
The Relationship ◽  
Work First

In this chapter, we analyzed the stock market reaction to internationalization and diversification of the European telecom firms through acquisitions or strategic alliances. We analyzed these operations with the purpose of verifying to what extent the stock market reaction to these business combinations is influenced by information asymmetry, resource complementarity, and management costs. There are two main findings of this work. First, while acquisitions are more valued when entering into one of the more related businesses—telecommunication equipment shops—alliances, however, are only positively valued in the less related businesses. Second, the strength of the competitive position of the firm moderates the relationship between product and market diversification and abnormal returns.

scholarly journals Exploring the Interaction Effects of Board Meetings on Information Disclosure and Financial Performance in Public Listed Companies

Economies ◽  
2021 ◽  
Vol 9 (4) ◽  
pp. 139
Author(s):  
Noor Azuddin Yakob ◽  
Norraidah Abu Hasan
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Agency Theory ◽  
Board Of Directors ◽  
Information Disclosure ◽  
Interaction Effects ◽  
Return On Equity ◽  
Firm Financial Performance ◽  
The Board Of Directors ◽  
The Relationship

The board of directors’ role is paramount in businesses because it reflects the organisation’s ability to earn investor confidence and improve financial performance. This paper aims to examine the relationship between environmental and social (ES) information disclosure and firm financial performance and the interaction effects of board meetings on the relationship between ES and firm performance in Malaysian publicly traded firms from 2013 to 2017. This article contributes to the theoretical foundations of the agency theory as it relates to the corporate governance function. The agency theory framework is used to capture the inherent interrelationships between the board of directors and firm performance. The study’s findings indicate that a firm’s relationship between ES and financial performance, measured by Tobin Q and return on equity, may be significantly affected by board meetings.

scholarly journals How Effective are School Years? : Examining the Link Between Human Capital and Economic Growth in European Countries, 2014-2019

2021 ◽  
Vol 66 (4) ◽  
pp. 467-481
Author(s):  
Ilona Ida Balog
Keyword(s):  
Economic Growth ◽  
Human Capital ◽  
European Countries ◽  
Negative Coefficient ◽  
Education Systems ◽  
Western European ◽  
The Relationship

This paper wishes to contribute to the examination of the relationship between human capital and economic growth. Human capital is measured by the average number of finished schooling years and its effect on economic growth is estimated on novel data in European countries. Data from the period between 2014 and 2019 show a negative coefficient for schooling years. In eastern countries in the analysis economic growth is generally higher than in Western-European countries. Economic growth in Hungary is higher than the estimated value explained by the analysed variables. The negative coefficient means that human capital measured by the number of schooling years does not accelerate economic growth any more, and further reforms of the education systems are needed in order to use human capital more efficiently.

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