Ownership Structure
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2021 ◽  
Vol 1 (3) ◽  
pp. 137-146
Sri Dwi Ari Ambarwati ◽  
ST Haryono

Companies experiencing financial distress will try to solve these problems with various improvement efforts. One of the efforts that can be done is to carry out management restructuring, namely management changes. This study focuses on the management restructuring strategy on manufacturing companies that experience a decrease in performance, with the proportion of Earning Before Interest and Tax which decreased for two or more consecutive years period 2010 to 2020. The reason for taking this period is to capture the period after the 1997 crisis until the occurrence of global crisis in 2008. This study aims to examine the effect of ownership structure in choosing management turnover restructuring. The data used is cross-section data and processed using logistic regression with Stata. The results of this research simultaneously show that insider ownership, institutional ownership, family ownership, and corporate characteristic variables have an impact on the management restructuring decision. This study proves that the ownership structure mechanism affects the choice of management restructuring in distressed companies in Indonesia.

Jerry Coakley ◽  
Aristogenis Lazos ◽  
Jose Liñares-Zegarra

AbstractThis paper investigates strategic entrepreneurial choice between the UK Big 3 platforms–Crowdcube, Seedrs and SyndicateRoom–that exemplify the three main equity crowdfunding (ECF) shareholder structures identified in the literature. ECF has become a strategic choice for both entrepreneurs and angel and venture capital funds as it offers mutually beneficial advantages to both, especially under the co-investment ECF model where these funds co-invest alongside the crowd. The multinomial probit results show that large founder teams are more likely to choose the co-investment model (SyndicateRoom) but are less likely to opt for the nominee ownership structure (Seedrs). Although less heterogeneous teams are more likely to choose the Seedrs and Crowdcube ownership structures, our results suggest that the probability of choosing the co-investment model (SyndicateRoom) monotonically increases as teams become more heterogeneous. The conclusion is that larger and heterogeneous teams are more likely to raise ECF funds from campaigns explicitly involving professional investors.

2022 ◽  
Vol 23 (1) ◽  

ABSTRACT Purpose: This research investigates whether the characteristics of corporate governance (executive compensation, board composition, ownership structure, and control) influence the sensitivity of remuneration to firms’ performance, the so-called pay-performance sensitivity. Originality/value: This study brings to the literature a new perspective on the interaction of corporate governance mechanisms aligned with the concept of pay-performance sensitivity. The study shows that governance instruments are not isolated but rather interrelated and interdependent. Design/methodology/approach: The study sample was composed of Brazil 100 Index (IBRX 100) companies listed on B3 from 2014 to 2018. Data were extracted from the Economatica® database, and the reference forms were accessed on the Securities and Exchange Commission of Brazil’s (CVM) website. We use panel data regression models with fixed and random-effects models. Findings: The board composition (represented by the CEO/Chairman duality) increases the pay-performance sensitivity, while the ownership concentration reduces it. In addition, a greater presence of independent members on the board reduces the variation in executive compensation.

2021 ◽  
Vol 22 (3) ◽  
pp. 581-601
Joanne Jovita Jodjana ◽  
Sherin Nathaniel ◽  
Rinaningsih Rinaningsih ◽  
Titin Pranoto

Research aims: This study aims to examine the effect of corporate governance, specifically relating to the ownership structure and board structure, on the possibility of financial distress.Design/Methodology/Approach: The sample used in this study are companies listed on the Indonesia Stock Exchange (IDX) from 2015 to 2019, excluding the financial industry. Conditional logistic regression is used as the study uses paired data based on the total assets of the company.Research findings: The results of this study indicate that board ownership, independent commissioners, and the board of directors can increase the likelihood of financial distress. On the other hand, institutional ownership and concentrated ownership are proven to have no effect on the likelihood of financial distress. The results of sensitivity testing using logistic regression showed different results on the variable institutional ownership, which is that institutional ownership can increase the likelihood of financial distress. Meanwhile, the other variables showed the same outcome as the main regression used in this study.Theoretical contribution/Originality: This study contributes to the knowledge on the relationship of board ownership, institutional ownership, concentrated ownership, independent commissioners and board size and the possibility of financial distress. Also, this research found that the provision of incentives in the form of shares to the board may not be an effective way to overcome financial distress in Indonesian firms.

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Helmi A. Boshnak

PurposeThis study examines the impact of board composition and ownership structure variables on dividend payout policy in Saudi Arabian firms. In particular, it aims to determine the effect of board size, independence and meeting frequency, in addition to chief executive officer (CEO) duality, and state, institutional, managerial, family, and foreign ownership on both the propensity to pay dividends and dividend per share for Saudi-listed firms over the period 2016–2019.Design/methodology/approachThe paper captures dividend policy with two measures, propensity to pay dividends and dividend per share, and employs a range of regression methods (logistic, probit, ordinary least squares (OLS) and random effects regressions) along with a two-stage least squares (2SLS) model for robustness to account for heteroscedasticity, serial correlation and endogeneity issues. The data set is a large panel of 280 Saudi-listed firms over the period 2016 to 2019.FindingsThe results underline the importance of board composition and the ownership structure in explaining variations in dividend policy across Saudi firms. More specifically, there is a positive relationship between the propensity to pay dividends and board-meeting frequency, institutional ownership, firm profitability and firm age, while the degree of board independence, firm size and leverage exhibit a negative relation. Further, dividend per share is positively related to board meeting frequency, institutional ownership, foreign ownership, firm profitability and age, while it is negatively related to CEO duality, managerial ownership, and firm leverage. There is no evidence that family ownership exerts an impact on dividend payout policy in Saudi firms. The findings of this study support agency, signalling, substitute and outcome theories of dividend policy.Research limitations/implicationsThis study offers an important insight into the board characteristic and ownership structure drivers of dividend policy in the context of an emerging market. Moreover, the study has important implications for firms, managers, investors, policymakers, and regulators in Saudi Arabia.Originality/valueThis paper contributes to the existing literature by providing evidence on four board and five ownership characteristic drivers of dividend policy in Saudi Arabia as an emerging stock market, thereby improving on less comprehensive previous studies. The study recommends that investors consider board composition and ownership structure characteristics of firms as key drivers of dividend policy when making stock investment decisions to inform them about the propensity of investee firms to pay dividends and maintain a given dividend policy.

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Syed Moudud-Ul-Huq ◽  
Kawsar Ahmed ◽  
Mohammad Ashraful Ferdous Chowdhury ◽  
Hafiz M. Sohail ◽  
Tanmay Biswas ◽  

Purpose This study aims to investigate the relationship between capital regulation and risk-taking behavior (financial stability) concerning the impacts of the recent global (COVID-19) crisis and diverse ownership structure. Design/methodology/approach The analysis uses an unbalanced panel data set from 32 commercial banks of Bangladesh for 2000–2020. The authors use the two-step system generalized method of moments and three-stage least squares to produce the study outcomes. Findings The robust results reveal that the relationship between capital regulation and risk (financial stability) is negative (positive) and bi-directional. More significantly, COVID-19 makes banks fragile and demands more capital to absorb risk. However, the effect of COVID-19 is heterogeneous when the authors consider ownership structure. Among the diverse ownership styles, Islamic and active shareholding show their controlling wheel on capital regulation and risk-taking aptitude (financial stability) during the global (COVID-19) crisis. In normal economic conditions, private banks and minority active shareholding can be a good determinant for capital regulation and risk (financial stability). On the other hand, state-owned and large banks have been found as less capitalized and highly risky. Originality/value This study is the pioneer in exploring capital regulation and risk toward the recent global (COVID-19) crisis.

2021 ◽  
Vol 8 (10) ◽  
pp. 151-160
Marouan Kouki ◽  

This study examines the ownership characteristics that influence the decision to diversify. The Logit model was used to show that ownership structure influences the probability of diversification. Empirical tests show that the presence of the first large shareholder increases the probability of diversification during the financial crisis period. This behavior is observed for the coalition of second and third shareholders only for periods during and after the crisis. The average level of probability for firms to be diversified is between 20% and 50%. Furthermore, results show that industrial firms and more willing to be diversified than firms in the financial sector.

2021 ◽  
Vol 12 (3) ◽  
pp. 631-669
Katarina Valaskova ◽  
Peter Adamko ◽  
Katarina Frajtova Michalikova ◽  
Jaroslav Macek

Research background: The paper investigates the earnings management phenomenon in the context of Central European countries, attempting to identify the factors and incentives that can influence earnings management behavior on a sample of 8,156 enterprises from Slovakia, the Czech Republic, Hungary, and Poland. Purpose of the article: The main purpose of the manuscript is to prove that there are significant differences in earnings management practices (measured by discretionary accruals) across the countries and to find the firm-specific features that influence the way enterprises manage their earnings. Methods: The modified Jones model was used to calculate the discretionary accruals, which are further analyzed across the countries. The statistically significant differences were confirmed across the countries. Thus, the impact of the economic sector, firm size, firm age, legal form, and ownership structure on earnings management behavior is studied by the Kruskal-Wallis test. The Dunn-Bonferroni post hoc tests then revealed the significant differences across the categories of the investigated earnings management determinants. To find the association between the particular earnings management practice (income-increasing or income-decreasing manipulation), correspondence analysis was used to visualize the mutual relations. Findings & value added: The results of the realized investigation revealed that the economic sector is one of the most important earnings management determinants, as its statistical significance was confirmed in each analyzed country. The correspondence analysis determined specific sectors, where income-increasing manipulation with earnings is practiced (NACE codes F, J, K, M, N), and vice versa, income-decreasing earnings management is characteristic for enterprises in sectors A, C, D, G or L. In specific economic conditions, firm size is also a relevant indicator (Hungary), or firm age and legal form and ownership structure (Poland). The recognition of crucial earnings management incentives may be helpful for authorities, policymakers, analysts and auditors when identifying various techniques and practices of earnings manipulation which could vary across the sectors and taking necessary measures to mitigate potential financial risks.

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