scholarly journals Ownership structure and financial performance: Evidence from panel data of South Korea

2008 ◽  
Vol 6 (2) ◽  
pp. 254-267 ◽  
Author(s):  
Sanghoon Lee
Keyword(s):  
Firm Performance ◽  
Panel Data ◽  
South Korea ◽  
Financial Performance ◽  
Ownership Structure ◽  
Empirical Support ◽  
Ownership Concentration ◽  
Minority Shareholders ◽  
Negative Effects ◽  
Firm Financial Performance

The study seeks to examine the effect of equity ownership structure on firm financial performance in South Korea. I focus on the role of two main dimensions of the ownership structure: Ownership concentration (i.e., the distribution of shares owned by majority shareholders) and identity of owners (especially, foreign investors and institutional investors). Using panel data for South Korea in 2000—2006, I find that firm performance measured by the accounting rate of return on assets generally improves as ownership concentration increases, but the effects of foreign ownership and institutional ownership are insignificant. I also find that there exists a hump-shaped relationship between ownership concentration and firm performance, in which firm performance peaks at intermediate levels of ownership concentration. The study provides some empirical support for the hypothesis that as ownership concentration increases; the positive monitoring effect of concentrated ownership first dominates but later is outweighed by the negative effects, such as the expropriation of minority shareholders. The empirical findings shed light on the role ownership structure plays in corporate performance, and thus offer insights to policy makers interested in improving corporate governance systems in an emerging economy such as South Korea.

scholarly journals Ownership Structure and Firm Financial Performance: Evidence from Panel Data in Sri Lanka

2012 ◽  
Vol 7 (1) ◽  
Author(s):  
Nirosha Hewa Wellalage ◽  
Stuart Locke
Keyword(s):  
Financial Performance ◽  
Ownership Structure ◽  
Legal Protection ◽  
Sri Lankan ◽  
Method Of Moment ◽  
Minority Shareholders ◽  
Insider Ownership ◽  
Firm Financial Performance ◽  
Internal Governance Mechanisms ◽  
Equity Ownership Structure

This study investigates the effects of equity ownership structure on financial performance of Sri Lankan listed businesses. Using dynamic panel generalised method of moment this study finds an inverse hump shape relationship between insider ownership and firm financial performance. The results of this study confirm that the effect of insider ownership on firm performance is more positive and significant where legal protection for investors is weak. It suggests that although new legislative reforms have been enacted, Sri Lankan companies are highly dependent on internal governance mechanisms. There is potential merit in promulgating new rules to control the expropriation of minority shareholders.

scholarly journals Corporate Governance and Firm Performance: Empirical Evidence from India

2016 ◽  
Vol 1 (2) ◽  
pp. 48-65 ◽  
Author(s):  
Surya Bahadur G.C.
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Panel Data ◽  
Financial Performance ◽  
Ownership Structure ◽  
Independence Number ◽  
Negative Relationship ◽  
Governance System ◽  
Board Committees ◽  
Governance Practices

The paper attempts to analyze inter-linkages between corporate governance, ownership structure, capital structure and firm performance in India. The study employs a panel data of all CNX Nifty companies from 2008 to 2012. Using LSDV panel data models and 2SLS model the study reveals that that good corporate governance practices adopted by companies is positively related with financial performance. Board independence, number of board committees, and director remuneration are found to have positive relationship while larger board size, ownership by promoters and financial leverage have negative relationship with performance. There is existence of bi-directional relationship between corporate governance and financial performance. Companies with sound financial performance are more likely to conform to corporate governance norms and standards and implement sound corporate governance system. In addition, the findings reveal that corporate governance practices adopted by the listed firms depend on their ownership structure. Ownership concentration is found to effect corporate governance negatively.Journal of Business and Management Research, Vol. 1 (2), 2016, pp. 48-65. 

scholarly journals Ownership structure, large inside/outside shareholders, and firm performance: evidence from Canada

2006 ◽  
Vol 3 (3) ◽  
pp. 96-112 ◽  
Author(s):  
Eduardo Schiehll
Keyword(s):  
Firm Performance ◽  
Panel Data ◽  
Ownership Structure ◽  
Voting Rights ◽  
Ownership Concentration ◽  
Negatively Associated ◽  
Public Firms ◽  
Large Shareholders

This study gathers additional evidence on the association between ownership concentration and firm performance, as measured by the firm’s Q ratio. Using panel data from a sample of 159 Canadian public firms over a three-year period, I focus on the distinction between large inside shareholders, who directly participate in the management of the firm, and large outside shareholders, who do not. I examine whether direct and indirect monitoring on the part of large shareholders has an impact on the association between ownership concentration and firm performance. Along with the distinction between large inside and outside shareholders, this study also investigates whether concentration of voting rights is associated to firm performance, and whether the identity of the owner affects this association. The findings suggest that large inside shareholdings tend to be negatively associated to firm performance, while no association is found in firms with a majority of large outside shareholdings or firms combining large inside and outside shareholdings in its ownership structure. Concentration of voting rights is negatively associated to firm performance only in firms with a majority of large outside shareholders, suggesting that the market may not discriminate between voting rights and ownership concentration in owner-managed firms. Although the results for the identity of large shareholders are not conclusive, there is evidence that family and institutional large shareholders wield different performance impacts

scholarly journals Ownership structure and firm performance: Evidence from Nigerian listed companies

2011 ◽  
Vol 8 (4) ◽  
pp. 391-400
Author(s):  
Adebiyi J. Abosede ◽  
Kajola Oluwafemi Sunday
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Linear Relationship ◽  
Ownership Structure ◽  
Significant Relationship ◽  
Listed Companies ◽  
Firm Financial Performance ◽  
Non Linear ◽  
The Relationship

This paper examines the relationship between firms’ ownership structure and financial performance in Nigeria, using a sample of thirty listed companies between 2001 and 2008. Using pooled OLS as a method of estimation and after controlling for four firm-specific characteristics, our results show a negative and significant relationship between ownership structure (director shareholding) and firm financial performance (ROE). This is in support of Entrenchment hypothesis. Also, our study does not support a non-linear relationship between ownership structure and firm performance.

Corporate governance, ownership structure and firms’ financial performance: insights from Muscat securities market (MSM30)

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Abdelbaset Queiri ◽  
Araby Madbouly ◽  
Sameh Reyad ◽  
Nizar Dwaikat
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Performance ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Securities Market ◽  
Board Size ◽  
Content Type ◽  
Firm Financial Performance ◽  
Individual Ownership

Purpose The purpose of this study is to investigate the relationship between selected board characteristics and ownership elements and the performance of firms listed in the Muscat Securities Market (MSM30). The examination focused on how the firm financial performance was affected by the board size, the number of board meetings and the ratio of the independent board of directors along to the ownership concentration types (i.e. institutional, state and concentrated individual ownership). Design/methodology/approach Data were extracted from the annual reports available online on the MSM30 website over a period of seven years (2009–2015). The sample consisted of 14 firms belonging to the non-financial sector. The data were of a balanced type and there were 98 observations. The analysis was conducted using the ordinary least square in STATA with the use of the robustness technique of standard error. Findings The findings of this study provide evidence that the selected elements for board characteristics and ownership influence firm performance. Nevertheless, such influence has its interpretation that differs to some extent from other securities markets in the developing countries. For instance, the ratio of the independent board of directors, the number of board director’s meetings, state ownership and concentrated individual ownership were inversely affecting the firm performance. However, institutional ownership and board size were found to have a positive effect on firm performance. Originality/value Studies on the influence of corporate governance and ownership structures in the context of Oman are still scarce. MSM30 received little attention, even though such an index encompasses the most liquid and the most profitable firms. MSM30 is an important index for investors in Oman looking for capital gains. Accordingly, this present study contributes to the knowledge body by providing new findings related to Oman and compares it with the other markets within Gulf Council Countries (GCC) and around the world. This will provide more understanding of the Omani context. Moreover, the authors anticipate that the outcomes of this research, which so far is the most comprehensive study in the Omani context in terms of the impact of corporate governance and ownership structure on firm financial performance can significantly shape corporate governance discourse, practices and policies in Oman, in particular, and in other GCC countries in general, to improve financial performance and corporate sustainability.

Global financial crisis, ownership structure and firm financial performance

2017 ◽  
Vol 34 (4) ◽  
pp. 447-465 ◽  
Author(s):  
Ali Salman Saleh ◽  
Enver Halili ◽  
Rami Zeitun ◽  
Ruhul Salim
Keyword(s):  
Financial Crisis ◽  
Financial Performance ◽  
Ownership Structure ◽  
Family Firms ◽  
Global Financial Crisis ◽  
Ownership Concentration ◽  
Financial Leverage ◽  
Content Type ◽  
Crisis Period ◽  
The Global Financial Crisis

Purpose This paper aims to investigate the financial performance of listed firms on the Australian Securities Exchange (ASX) over two sample periods (1998-2007 and 2008-2010) before and during the global financial crisis periods. Design/methodology/approach The generalized method of moments (GMM) has been used to examine the relationship between family ownership and a firm’s performance during the financial crisis period, reflecting on the higher risk exposure associated with capital markets. Findings Applying firm-based measures of financial performance (ROA and ROE), the empirical results show that family firms with ownership concentration performed better than nonfamily firms with dispersed ownership structures. The results also show that ownership concentration has a positive and significant impact on family- and nonfamily-owned firms during the crisis period. In addition, financial leverage had a positive and significant effect on the performance of Australian family-owned firms during both periods. However, if the impact of the crisis by sector is taking into account, the financial leverage only becomes significant for the nonmining family firms during the pre-crisis period. The results also reveal that family businesses are risk-averse business organizations. These findings are consistent with the underlying economic theories. Originality/value This paper contributes to the debate whether the ownership structure affects firms’ financial performance such as ROE and ROA during the global financial crisis by investigating family and nonfamily firms listed on the Australian capital market. It also identifies several influential drivers of financial performance in both normal and crisis periods. Given the paucity of studies in the area of family business, the empirical results of this research provide useful information for researchers, practitioners and investors, who are operating in capital markets for family and nonfamily businesses.

scholarly journals The structure of corporate ownership and firm performance: Sri Lankan evidence

2013 ◽  
Vol 11 (1) ◽  
pp. 723-734 ◽  
Author(s):  
Athula Manawaduge ◽  
Anura De Zoysa
Keyword(s):  
Firm Performance ◽  
Performance Measures ◽  
Ownership Structure ◽  
Emerging Market ◽  
Ownership Concentration ◽  
Sri Lankan ◽  
Accounting Performance ◽  
Listed Firms ◽  
Strong Positive Relationship ◽  
The Impact

This paper examines the impact of ownership structure and concentration on firm performance in Sri Lanka, an emerging market in Asia. The study estimates a series of regressions using pooled data for a sample of Sri Lankan-listed firms to investigate the impact of ownership concentration and structure on firm performance based on agency theory framework, using both accounting and market-based performance indicators. The results of the study provide evidence for a strong positive relationship between ownership concentration and accounting performance measures. This suggests that a greater concentration of ownership leads to better performance. However, we found no significant impact using market-based performance measures, which suggests the existence of numerous market inefficiencies and anomalies. Furthermore, the findings of the study show that ownership structure does not have a significant distinguishable effect on performance.

Intellectual capital in Ugandan service firms as mediator of board governance and firm performance

2014 ◽  
Vol 5 (3) ◽  
pp. 300-340 ◽  
Author(s):  
Stephen Korutaro Nkundabanyanga ◽  
Joseph M. Ntayi ◽  
Augustine Ahiauzu ◽  
Samuel K. Sejjaaka
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Intellectual Capital ◽  
Predictor Variable ◽  
Mediating Effect ◽  
Board Governance ◽  
Content Type ◽  
Firm Financial Performance ◽  
Starting Point ◽  
The Relationship

Purpose – The purpose of this paper is to examine the mediating effect of intellectual capital on the relationship between board governance and perceived firm financial performance. Design/methodology/approach – This study was cross-sectional. Analyses were by SPSS and Analysis of Moment Structure on a sample of 128 firms. Findings – The mediated model provides support for the hypothesis that intellectual capital mediates the relationship between board governance and perceived firm performance. while the direct relationship between board governance and firm financial performance without the mediation effect of intellectual capital was found to be significant, this relationship becomes insignificant when mediation of intellectual capital is allowed. Thus, the entire effect does not only go through the main hypothesised predictor variable (board governance) but majorly also, through intellectual capital. Accordingly, the connection between board governance and firm financial performance is very much weakened by the presence of intellectual capital in the model – confirming that the presence of intellectual capital significantly acts as a conduit in the association between board governance and firm financial performance. Overall, 36 per cent of the variance in perceived firm performance is explained. the error variance being 64 per cent of perceived firm performance itself. Research limitations/implications – The authors surveyed directors or managers of firms and although the influence of common methods variance was minimal, the non-existence of common methods bias could not be guaranteed. Although the constructs have been defined as precisely as possible by drawing upon relevant literature and theory, the measurements used may not perfectly represent all the dimensions. For example board governance concept (used here as a behavioural concept) is very much in its infancy just as intellectual capital is. Similarly the authors have employed perceived firm financial performance as proxy for firm financial performance. The implication is that the constructs used/developed can realistically only be proxies for an underlying latent phenomenon that itself is not fully measureable. Practical implications – In considering the behavioural constructs of the board, a new integrative framework for board effectiveness is much needed as a starting point, followed by examining intellectual capital in firms whose mediating effect should formally be accounted for in the board governance – financial performance equation. Originality/value – Results add to the conceptual improvement in board governance studies and lend considerable support for the behavioural perspective in the study of boards and their firm performance improvement potential. Using qualitative factors for intellectual capital to predict the perceived firm financial performance, this study offers a unique dimension in understanding the causes of poor financial performance. It is always a sign of a maturing discipline (like corporate governance) to examine the role of a third variable in the relationship so as to make meaningful conclusions.

Effect of Ownership Structure on Firm Performance Evidence From Non-Financial Listed Firms

2021 ◽  
pp. 143-170
Author(s):  
Muhammad Arslan
Keyword(s):  
Firm Performance ◽  
Ownership Structure ◽  
Causal Effect ◽  
Random Effect ◽  
Random Effect Model ◽  
Least Square ◽  
Ownership Concentration ◽  
Variable Model ◽  
Listed Firms ◽  
Dummy Variable

In modern organizations, there is a separation between ownership and control of the firm. On the lenses of agency theory, this study statistically examines the relationship between ownership structure (i.e., ownership concentration and owner identity) and firm performance of non-financial listed firms of Pakistan by taking firm-level control variables of size, age, liquidity, financial leverage, and growth of the firm. Secondary data is collected from annual reports of 65 non-financial listed firms for the year 2008 to 2012. The least-square dummy variable model followed by the random effect model has been employed to statistically determining the impact of ownership structure on firm performance. The results of the least square dummy variable model reveal that the ownership concentration has a significant positive impact on firm performance. The owner identity (such as dispersed, family, institutional, and government ownership) has a significant causal effect on firm performance as indicated from t and p values.

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