scholarly journals Does Ownership Structure Matter For Publicly Listed Companies Performance In Malaysia?

2015 ◽  
Author(s):  
Rozita Arshad
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Listed Companies ◽  
Governance Practices ◽  
Using Data ◽  
Open Markets ◽  
The Impact ◽  
The Relationship ◽  
Insight Into

The word of corporate governance has become a very important concept that requires many countries around the world to concentrate on its reformation. Globalisation of markets, open markets competition, and international business has generated awareness about the importance of improving corporate governance practices. Protecting shareholders and other stakeholders are also being attentive agenda and play important roles in corporate governance reforms due to ensure their value creation and their right as the owner of the shares. This article attempts to address this issue by examining the relationship between ownership structure and firm performance. The hypothesis is tested by assessing the impact of the structure of ownership on firm performance, using data for 237 Malaysia Public Listed Companies (PLCs). Therefore, this paper will provide an insight into further understanding on the issue of the relationship between ownership structure and firm performance Keywords: Corporate governance, ownership structure, shareholders, firm performance

scholarly journals Corporate performance and boards’ dilemma of listed subsidiaries

2013 ◽  
Vol 10 (4) ◽  
pp. 130-147 ◽  
Author(s):  
Emiliano Di Carlo ◽  
Francesco Ranalli
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Financial Performance ◽  
Ownership Structure ◽  
Corporate Performance ◽  
Listed Companies ◽  
The Impact ◽  
The Relationship ◽  
Parent Companies

The paper focuses on listed companies controlled by other (listed or not listed) entities. The decisionmaking power of listed subsidiary’s boards could be strongly influenced by (or instead could be autonomous from) the parent companies’ board. However, so far literature on corporate governance seems not to have considered adequately this aspect as well as the impact of that influence on listed companies’ financial performance and on corporate governance variables. The main objective of this paper is to explore how and why this phenomenon is relevant, giving some preliminary suggestions on the interpretation of the ownership structure, board demography and the financial performances of directed listed subsidiaries. In order to explore the relevance of the phenomenon, we use a sample of Italian listed companies controlled and consolidated by other companies for the year 2010. The analysis shows that 71.4% (145 firms) of Italian non-financial listed companies are consolidated by the respective controlling entities and 24.1% (35 firms) of these listed subsidiaries declare to be directed by their parents. Thus, they are not independent economic entities and the effort to study the relationship between corporate governance variables and firm performance could be strongly biased.

scholarly journals The impact of corporate governance on firm performance in Egyptian listed companies

2013 ◽  
Vol 11 (1) ◽  
pp. 691-705 ◽  
Author(s):  
Ehab K. A. Mohamed ◽  
Mohamed A. Basuony ◽  
Ahmed A. Badawi
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Stock Exchange ◽  
Listed Companies ◽  
Board Independence ◽  
Board Structure ◽  
Cross Sectional ◽  
Book Value ◽  
The Impact

This paper examines the impact of corporate governance on firm performance using cross sectional data from non-financial companies listed in the Egyptian Stock Exchange. The 88 non-financial companies on EGX100 index of listed companies on the Egyptian Stock Market are studied to examine the relationship between ownership structure, board structure, audit function, control variables and firm performance by using OLS regression analysis. The results show that ownership structure has no significant effect on firm performance. The only board structure variable that has an effect on firm market performance is board independence. Firm book value performance is affected by both board independence and CEO duality. Firm size and leverage have varying effects on both market and book value performance of firms

Corporate Governance and Performance of Shariah-Compliant Companies

2020 ◽  
pp. 547-566
Author(s):  
Mustafa Bin Mohd Hanefah ◽  
Muhammad Iqmal Hisham Kamaruddin ◽  
Rosnia Masruki ◽  
Mohd Marzuki Ismail
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Negative Correlation ◽  
Consumer Products ◽  
Board Size ◽  
Governance Practices ◽  
And Performance ◽  
Using Data ◽  
Code Of Corporate Governance ◽  
The Relationship

This chapter examines the relationship between corporate governance practices and firm performance. The characteristics of the board of Shari'ah-compliant companies in consumer products counter of Bursa Malaysia were examined against the firm's performance using data from 77 companies from 2014 to 2016. Based on the result of multiple regression; board size, Muslim chairman, and Muslim director have a weak positive correlation with the performance of the firms. However, directors with Shari'ah background seem to have a negative correlation with the performance of the firms. The findings of the chapter would be very useful to the regulators to improve the Malaysian Code of Corporate Governance (MCCG). The findings also help to fill the gap on scarce literature that study the relationship between the corporate governance practices involving Muslim characteristics and performance.

scholarly journals Corporate governance: the impact of director and board structure, ownership structure and corporate control on the performance of listed companies on the Ghana stock exchange

2016 ◽  
Vol 16 (2) ◽  
pp. 259-277 ◽  
Author(s):  
Josephine Darko ◽  
Zakaria Ali Aribi ◽  
Godfrey C. Uzonwanne
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Audit Committee ◽  
Corporate Control ◽  
Sub Saharan Africa ◽  
Board Structure ◽  
Content Type ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to examine the relationship between corporate governance and firm performance of listed Ghanaian companies. Design/methodology/approach The paper adopts a longitudinal and cross-sectional data set of 20 sampled companies over a period of five years. The data were analyzed using a panel regression and ANOVA analysis to establish the relationship between corporate governance and firm performance. Corporate governance is defined in terms of three indices – board structure, ownership structure and corporate control, while firm performance is measured by return on assets, return on equity, net profit margin and Tobin’s Q. Findings The empirical results show that ownership concentration and female representation on board have a positive impact on performance. Although the results revealed no evidence to support the impact of board size and audit committee size on performance, there is significant evidence to support the fact that independent directors and audit committee frequency both adversely affect firm performance. Research limitations/implications The scope of this paper can be expanded to include non-listed firms. In addition, other corporate governance mechanisms could be considered to broaden the scope of the paper. Originality/value This paper contributes to the scarce literature on corporate governance and firm performance in developing countries, especially in sub-Saharan Africa. The paper provides useful information that is of great value to policymakers, academics and other stakeholders.

scholarly journals Corporate governance and firm performance: Evidence from Vietnamese listed companies

2020 ◽  
Vol 9 (2) ◽  
Author(s):  
Pham Thi Ngoc Bich ◽  
Nguyen Dinh Hoang Uyen
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Supervisory Board ◽  
Listed Companies ◽  
Managerial Ownership ◽  
Data Set ◽  
Management Ownership ◽  
The Relationship

The research aims to provide empirical evidence on the relationship between corporate governance and firm performance in Vietnam – a developing economy in Asia. It focuses on the corporate governance of Vietnamese listed companies with a data-set of the five-year period from 2011 to 2015. Vietnamese listed companies are governed and controlled by two boards, Board of Directors and Supervisory Board. The research investigates the impacts of directors’ and supervisors’ characteristics and ownership structure on firm performance. The outcomes reveal that most governance mechanisms employed by Vietnamese listed companies were not effective and had no effect on the companies’ performance, except for managerial ownership and Supervisory Board size. Specifically, management ownership and firm performance were negatively correlated. Additional analyses show a positive relationship between the number of supervisors and firm performance, which was measured by market-based measurement.

Independent directors, ownership concentration and firm performance in listed companies

2017 ◽  
Vol 29 (2) ◽  
pp. 204-226 ◽  
Author(s):  
Thi Tuyet Mai Nguyen ◽  
Elaine Evans ◽  
Meiting Lu
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Listed Companies ◽  
Ordinary Least Squares ◽  
Ownership Concentration ◽  
Independent Directors ◽  
Content Type ◽  
Controlling Shareholders ◽  
The Impact ◽  
The Relationship

Purpose The purpose of this paper is to investigate the impact of independent directors on firm performance in Vietnam and identify how different types of ownership structure and the presence of controlling shareholders influence the relationship. Design/methodology/approach For a sample of 217 non-financial Vietnam-listed companies during the period from 2010 to 2014, this study uses the ordinary least squares regressions to estimate the relationship between independent directors and firm performance. Two econometric techniques – the fixed effects estimation and the difference in difference estimation – are used to control for endogeneity. The results are also robust to the lag variable of independent directors. Findings The results reveal that independent directors have an overall negative effect on firm operating performance. This finding may be because of information asymmetry, expertise disadvantage and the dominance of ownership concentration that prevent independent directors from fulfilling their monitoring function in governance. The negative relationship between independent directors and firm performance is stronger in firms where the State is a controlling shareholder. Research limitations/implications Findings suggest that changes relating to independent directors, as a response to the new corporate governance code in 2012, do not have a positive effect on the relationship between corporate governance and firm performance. Further reform is required to improve internal control mechanisms and corporate governance systems in Vietnam. Originality/value This is the first study to provide a robust evidence on the relationship between independent directors and firm performance in Vietnam as well as to explore the impact of the type of controlling shareholders on the relationship.

Corporate governance, globalization and firm performance in emerging economies

2018 ◽  
Vol 67 (8) ◽  
pp. 1310-1333 ◽  
Author(s):  
Neha Saini ◽  
Monica Singhania
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Panel Data ◽  
Foreign Capital ◽  
Good Governance ◽  
Foreign Ownership ◽  
Foreign Firms ◽  
Content Type ◽  
Governance Practices ◽  
The Relationship

PurposeThe purpose of this paper is to examine relationship between corporate governance (CG) and firm performance for a set of 255 foreign-funded firms in the form of foreign direct investment (FDI) and private equity (PE). The authors employ a wide range of CG measures including board size, meetings, board gender and foreign ownership which are used as the proxy of globalisation and control variables like firm age, leverage, firm size and capital expenditure to arrive at a conclusion.Design/methodology/approachPanel data set of 255 (187 companies funded by foreign capital in the form of FDI, and 68 companies having foreign capital in the form PE) companies listed on Bombay Stock Exchange, for the period of eight years (2008–2015) are analysed by using static (fixed and random effects) and dynamic (generalised method of moments (GMM)) panel data specifications to examine the relationship among CG, globalisation and firm performance.FindingsThe empirical results of static model indicate the relationship between CG and performance of foreign firms, which are not very strong in India. This is due to the fact that most of the firms are not following the guidelines and regulations strictly in the initial period of sample years. Diversity in board is found as an important variable in accessing firm performance. And the authors also found that foreign firms are very particular about the implementation of CG norms. The results of GMM model highlight the interaction term of foreign ownership with governance indicators. CG is having a positive and significant impact over performance, inferring that higher foreign ownership (in the form of FDI and PE) in firm leading to positive effect on profitability.Practical implicationsThe investor’s preference of financing a unit is guided by the performance of a firm. Investors are more inclined towards high-performing firms, and hence higher profitability leads to higher inflow of capital. The result indicates that higher accounting and market performance may be achieved by good governance practices, in turn, leading to reduced agency costs. Countries with high governance scores attract more of foreign capital. Similar to the best governed countries, the companies having good governance practices attract more foreign inflows in the form of capital.Originality/valueWhile previous literature considered a single measurement framework in the form of a CG index, the authors tried to incorporate a range of CG indicators to study the effect of globalisation and CG on firm performance. The authors segregated foreign-owned funds into two parts, especially FDI and PE. This paper examined heterogeneity in the form of FDI-funded and PE-funded firms, as no prior literature is available which has evaluated different sets of foreign funds simultaneously on CG.

scholarly journals The board of directors and firm performance: empirical evidence from listed companies

2019 ◽  
Vol 19 (3) ◽  
pp. 508-551 ◽  
Author(s):  
Alessandro Merendino ◽  
Rob Melville
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Agency Theory ◽  
Ownership Structure ◽  
Listed Companies ◽  
Independent Directors ◽  
Board Structure ◽  
Board Size ◽  
Ceo Duality ◽  
Content Type

PurposeThis study aims to reconcile some of the conflicting results in prior studies of the board structure–firm performance relationship and to evaluate the effectiveness and applicability of agency theory in the specific context of Italian corporate governance practice.Design/methodology/approachThis research applies a dynamic generalised method of moments on a sample of Italian listed companies over the period 2003-2015. Proxies for corporate governance mechanisms are the board size, the level of board independence, ownership structure, shareholder agreements and CEO–chairman leadership.FindingsWhile directors elected by minority shareholders are not able to impact performance, independent directors do have a non-linear effect on performance. Board size has a positive effect on firm performance for lower levels of board size. Ownership structure per se and shareholder agreements do not affect firm performance.Research limitations/implicationsThis paper contributes to the literature on agency theory by reconciling some of the conflicting results inherent in the board structure–performance relationship. Firm performance is not necessarily improved by having a high number of independent directors on the board. Ownership structure and composition do not affect firm performance; therefore, greater monitoring provided by concentrated ownership does not necessarily lead to stronger firm performance.Practical implicationsThis paper suggests that Italian corporate governance law should improve the rules and effectiveness of minority directors by analysing whether they are able to impede the main shareholders to expropriate private benefits on the expenses of the minority. The legislator should not impose any restrictive regulations with regard to CEO duality, as the influence of CEO duality on performance may vary with respect to the unique characteristics of each company.Originality/valueThe results enrich the understanding of the applicability of agency theory in listed companies, especially in Italy. Additionally, this paper provides a comprehensive synthesis of research evidence of agency theory studies.

Corporate governance mechanisms and corporate performance of firms in Nigeria and Ghana

2020 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Martha Coleman ◽  
Mengyun Wu
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Financial Distress ◽  
Corporate Performance ◽  
Tobin’S Q ◽  
Tobin's Q ◽  
Content Type ◽  
Structure Index ◽  
The Impact ◽  
The Relationship

PurposeThis study investigates the impact of corporate governance (CG) mechanisms with inclusion of compliance and diligence index on corporate performance (CP) of firms in Nigeria and Ghana. It further examines the moderating effect of financial distress on the relationship between CG and CP.Design/methodology/approachThe study used panel data of 102 nonfinancial listed firms of Nigeria and Ghana stock exchange for the period 2012–2016 with total observation of 510. The study first used OLS in estimating the influence of CG mechanisms on CP. Due to multicollinearity in the independent variables, ridge regression was employed.FindingsIt was revealed that ownership structure index and board compliance and diligence index, board size, board disclosure, ownership structure, shareholders' right and board compliance and diligence index had positive influence on ROA and ROE. Growth of Tobin's Q depends on board procedure and board compliance and diligence index. Also, financial distress (ZFS) negatively moderates the relationship between board structure index, board disclosure index, board procedure index, shareholders' right and performance (ROA and ROE) but negatively moderates between ownership structure index and Tobin's Q.Practical implicationsThis study provides interesting findings to policymakers in full implementation of CG codes as stated by OCED (2015) by West African firms with greater emphasis on compliance and diligence index since it positively influences all CP measures.Originality/valueThe study provides evidence of the importance of the introduction of the new index: compliance and diligence, which looks at disclosure of CSR activities. This has been overlooked by most researchers especially in Africa in assessing quality CG mechanisms.

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