Persistent high liquidity, ownership structure and firm performance: Indian evidence

The paper investigates the characteristics and performance of the persistent high liquidity firms in India in the backdrop of ownership concentration. Empirical evidence reveals that the persistent high liquidity firms consistently post superior performance, have better growth prospect and resort to less debt financing. Ownership structure has no influence on the performance of such firms. Consistent with trade off theory we find that persistent cash holding as a policy beyond a certain period may hinder performance. Industry-and- size matched comparison firms with non-persistent liquidity tend to overinvest having a negative impact on performance. Ownership concentration adversely impacts performance of such firms.

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Principal-principal conflicts leading to activism of a large government-owned investor in Brazil

Corporate Governance and Organizational Behavior Review ◽

10.22495/cgobrv5i1p2 ◽

2021 ◽

Vol 5 (1) ◽

pp. 15-21

Author(s):

Bruno Elmôr Duarte ◽

Ricardo Pereira Câmara Leal

Keyword(s):

Corporate Governance ◽

Government Policy ◽

Poor Performance ◽

Ownership Concentration ◽

Minority Shareholders ◽

Trade Off ◽

Legal Proceedings ◽

Brazilian Government ◽

And Performance

This article analyzes conflicts between principals that led to activism by one large Brazilian government-owned investor as a minority shareholder and verifies the antecedents, means employed, apparent motivations, and effectiveness of its reactions (Goranova & Ryan, 2014). It examines the cases of three large high ownership concentration listed companies using solely public sources. Poor performance was a frequent conflict antecedent. No evident trade-off between activism and corporate governance (CG) practices emerged. High ownership concentration influenced the way the investor reacted and its success because opposition through internal CG mechanisms was usually not successful and led to legal proceedings. The limitations of the regulatory framework became evident from the mixed outcomes of these proceedings. The investor was not exclusively financially motivated and it occasionally opposed the interests of other minority shareholders to follow government policy. These findings illustrated how high ownership concentration rendered difficult the mitigation of principal-principal conflicts even for a large government-owned investor and help explain the failure of previous econometric studies to relate activism, quality of CG practices and performance (Young, Peng, Ahlstrom, Bruton, & Jiang, 2008)

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Ownership structure and performance: A comparison of different corporate governance systems

Corporate Ownership and Control ◽

10.22495/cocv2i4p7 ◽

2005 ◽

Vol 2 (4) ◽

pp. 76-85 ◽

Cited By ~ 6

Author(s):

Alberto de Miguel Hidalgo ◽

Julio Pindado ◽

Chabela de la Torre

Keyword(s):

Corporate Governance ◽

Ownership Structure ◽

Ownership Concentration ◽

Institutional Factors ◽

Insider Ownership ◽

Market For Corporate Control ◽

Governance Systems ◽

The World ◽

And Performance ◽

The Relationship

This paper analyses how the main institutional factors characterizing corporate governance systems around the world affect the relationship between ownership structure and firm performance. Our analysis gives rise to the following remarks. First, ownership concentration and insider ownership levels are determined by several institutional features such as investor protection, development of capital markets, activity of the market for corporate control, and effectiveness of boards. Second, the relationship between ownership concentration and performance is not directly affected by these institutional factors. Third, there is, however, a direct influence of corporate governance characteristics on the relationship between insider ownership and performance.

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The Relationship between the Ownership Structure, Capital Structure and Performance

JABM JOURNAL of ACCOUNTING - BUSINESS & MANAGEMENT ◽

10.31966/jabminternational.v1i25.326 ◽

2018 ◽

Vol 1 (25) ◽

pp. 1 ◽

Cited By ~ 1

Author(s):

Ali Al-Thuneibat

Keyword(s):

Capital Structure ◽

Ownership Structure ◽

Negative Impact ◽

Positive Impact ◽

Stock Exchange ◽

Return On Assets ◽

Service Companies ◽

Concentrated Ownership ◽

And Performance ◽

The Relationship

This paper aims at providing an empirical evidence concerning the relationship between the ownership structure, capital structure and financial performance of the shareholding companies listed in Amman Stock Exchange (ASE). To measure the ownership structure, the researcher used four variables including foreign, institutional, managerial and concentrated ownership. The capital structure is measured by using the leverage, and the performance is measured by using the return on assets (ROA). To achieve the objectives of the study, a sample of 86 firms from the industrial and service companies listed in ASE during the period 2010 and 2014 is used. The results of the study showed that the relationship between ownership structure in general, and performance is positive and statistically significant, however, the results showed that the various types of ownership structure have different types of relationships with performance. More specifically, there is a negative impact of institutional and foreign ownerships on the performance and positive impact of concentrated and managerial ownerships. The results also revealed that there is a positive impact of the financial leverage on the relationship between ownership structure and firm performance. The findings of the study provide implications to the regulators, investors and managers in Jordan to take into consideration the environment-specific factors when developing corporate regulations and encourage concentrated and managerial ownership because they have positive impact on performance.

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Environment-Strategy-Performance Linkages: A Study of Indian Firms during Economic Liberalization

Vikalpa The Journal for Decision Makers ◽

10.1177/0256090920040202 ◽

2004 ◽

Vol 29 (2) ◽

pp. 9-24 ◽

Cited By ~ 12

Author(s):

Sougata Ray

Keyword(s):

Emerging Economies ◽

Corporate Strategy ◽

Negative Impact ◽

Market Performance ◽

Economic Liberalization ◽

Superior Performance ◽

Firm Strategies ◽

Strategic Behaviour ◽

Scale Expansion ◽

And Performance

How firms from emerging economies transform themselves to adapt to the changing institutional environment during economic liberalization has generated a lot of interest among management scholars and practitioners alike. This paper presents an analysis of the corporate strategic behaviour of firms in India, a giant emerging economy undergoing economic reforms over the last one decade. Based on existing theories, a multivariate model has been developed to explore the contingency linkages of environment, corporate strategy, and performance. The model has been empirically verified in LISREL framework using primary and secondary data for 111 firms mainly belonging to the list of top 500 firms in India. The major observations emerging from the analysis are as follows: Environment played a significant role in shaping firm strategies and performance during reforms. Environmental munificence and competitive intensity influenced firm strategies and performance as hypothesized. Availability of high growth and profit opportunities across industries, easier access to resources in the international market, improvement in the supply situation, etc., had the greatest influence on the strategic behaviour of firms in the liberalized era. Firms facing intense competition and demanding customers reorganized the business portfolio by divesting some businesses and moving into more promising unrelated businesses, cut down the organization flab through downsizing, and promoted greater sharing of resources within. Firms having better environment-strategy ‘fit’ achieved superior performance. The effect of environment on firm performance was moderated by firm strategies. This conforms to the general principle of contingency theory derived based on the developed economy institutional framework. Among the corporate strategies, scale expansion strategy was found to be the most effective, as it yielded superior profit and market performance. Scale expansion benefited firms not only in gaining advantage due to economy of scale but also in using more modern technology and equipments. The strategy of product-market diversification did not have any significant effect on profitability. However, it resulted in poor market performance as observed from the significant negative influence of business scope on market return. This indicates that investors were generally wary of diversification moves by firms. Increased diversity in operation did not have any significant negative impact on performance. Therefore, unrelated diversification per se did not harm firms, at least, in the short run. The study does not support the earlier observations by researchers that firms with focused strategy and adopting defensive strategic orientation perform better during deregulation of industries in both developed and emerging economies. In fact, it can be observed that, during economic liberalization in India, firms that recognized the favourable and unfavourable changes in the environment early and increased their scale of business and diversified into deregulated industries selectively but aggressively achieved superior performance

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

Journal of Nepalese Business Studies ◽

10.3126/jnbs.v12i1.28148 ◽

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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A New Perspective on Ownership Identities in China's Listed Companies

Management and Organization Review ◽

10.1111/j.1740-8784.2006.00048.x ◽

2006 ◽

Vol 2 (3) ◽

pp. 319-343 ◽

Cited By ~ 87

Author(s):

Andrew Delios ◽

Zhi Jian Wu ◽

Nan Zhou

Keyword(s):

Ownership Structure ◽

Empirical Work ◽

Listed Companies ◽

Ownership Concentration ◽

Legal Person ◽

New Classification ◽

Chinese Firms ◽

New Perspective ◽

And Performance

We introduce a new perspective on the conceptualization and measurement of ownership identities of China's listed companies. Previous work analyzing the strategy and performance implications of the ownership structure in Chinese firms has used the official categorization provided by state bodies in China. In this categorization, state shareholding, legal person shareholding and A-shares dominate. This official categorization, however, obscures the ultimate identity of a shareholder; this can confound conceptual and empirical work on die strategy and performance implications of ownership identity. We refine the existing classification by recategorizing shareholders into 16 types, which can then be regrouped into relevant categories of shareholders, such as government or private, to enable analysis of ownership identity and ownership concentration issues in China's listed companies. Our new classification can help provide consistency in the burgeoning research on the strategy and performance implications of the concentration and identity aspects of ownership structure in China's listed companies.

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Ownership, control and performance in the most actively traded companies on Stockholm stock exchange. A comparison between 1999 and 2001

Corporate Ownership and Control ◽

10.22495/cocv4i1p13 ◽

2006 ◽

Vol 4 (1) ◽

pp. 146-155 ◽

Cited By ~ 1

Author(s):

Per-Olof Bjuggren ◽

Helena Bohman

Keyword(s):

Ownership Structure ◽

Firm Value ◽

Stock Price ◽

Stock Exchange ◽

Ownership Concentration ◽

Inside Ownership ◽

The Subject ◽

And Performance ◽

The Relationship ◽

Ownership Control

The relationship between ownership, control and firm value is the subject matter studied. The study is essentially empirical. Data about the most actively traded non-financial companies on the Stockholm Stock Exchange is used. A comparison is made between the years 1999 and 2001. What do the relationships between firm value and different ownership characteristics like ownership concentration, foreign ownership and inside ownership look like? Do these characteristics differ between the booming year of 1999 and the recession year of 2001? Is there a relation between stock price and ownership structure? These are the three main questions addressed in the study.

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Ownership, board structure, and corporate performance: Evidence of French VC-backed firms

Corporate Board role duties and composition ◽

10.22495/cbv6i3art1 ◽

2010 ◽

Vol 6 (3) ◽

pp. 7-20 ◽

Cited By ~ 1

Author(s):

Amina Hamdouni

Keyword(s):

Firm Performance ◽

Venture Capital ◽

Ownership Structure ◽

Ownership Concentration ◽

Board Structure ◽

Outside Directors ◽

Strong Relation ◽

And Performance ◽

Capital Ownership ◽

Director Ownership

The purpose of this paper is to examine the effect of ownership structure and board structure on performance in VC-backed firms. Using 106 French VC-backed firms, our methodology in this paper is to estimate four equations. A regression analysis is then used to study the impact of ownership structure and board structure on performance and also to analyze whether ownership structure (ownership concentration, director ownership, venture capital ownership and employee ownership) and board variables (size, outside directors, COE-chairman duality, proportion of VC directors, proportion of employee directors and board meeting frequency) are significant determinants of VC-backed firm performance. Results indicate a strong positive relation between ownership concentration and performance and between director ownership and performance measured by ROE. And strong negative relation between ownership concentration and performance and between director ownership and performance measured by ROA. No strong relation was found between venture-capital ownership, employee ownership and firm performance. Results show also a strong negative relation between board size and performance measured by ROE and positive relation between board size and performance measured by ROA, Tobin’s Q and MVA. The proportion of independent outside directors on the board was positively associated with ROE and negatively associated with ROA. The presence of a dual leadership structure is negatively associated with ROE and positively associated with ROA. No strong relation was found between the proportion of venture-capital in board, the presence of employee in board, or board meeting frequency and firm performance.

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