The impact of ownership structure on firm performance. Hansen graduate school of management, university of washington, seattle, washington, u. Evidence from panel data of south korea sanghoon lee university of utah, department of economics abstract the study seeks to examine the effect of equity ownership structure on firm financial performance in south korea. This study examines the relationship between ownership structure and firm performance in chinese companies. For both the effect of total ownership concentration on firm performance and the effect of insider ownership concentration on firm performance, two main arguments arise from previous literature. State ownership has a convex relationship with firm performance. Corporate ownership structure and firm performance. Firm performance, institutional ownership and capital. The paper uses both financial and nonfinancial data from annual reports of the 700 public listed firms in. Majority of firms in the world have controlling shareholders, usually a.
We examine the effect of ownership structure on firm performance, for firms listed on vietnamese stock exchanges, using 2744 firm year observations over the period from 2007 to 2012. Ownership structure, firm performance, and corporate. This study examined the impact of capital structure on firm performance of manufacturing sector smes in uk for the period of 19982008. We examine the effect of ownership structure on firm performance, for firms listed on vietnamese stock exchanges, using 2744 firmyear observations over the. The impacts of ownership structure on firm performance. Contrary to our conjecture, we find family firms perform better than nonfamily firms. We employ nonparametric data envelopment analysis dea. Ownership structure and corporate performance ying li previous studies of ownership structure mainly focus on the relationship between insider ownership and corporate performance. I focus on the role of two main dimensions of the ownership. The purpose of this research is to determine whether there is a relationship between capital structure and. The objective of the paper is to survey the theoretical basis for and empirical evidences on the impact of ownership structure on firm performance. There are very little empirical studies in the existing literature that investigate the influence of.
The ownership structure that emerges, whether concentrated or diffuse, ought to be influenced by the profitmaximizing interests of shareholders, so that, as a result, there should be no systematic relation between variations in ownership structure and variations in firm performance. Firm performance in a global market yale university. Capital structure, equity ownership and firm performance abstract this paper investigates the relationship between capital structure, ownership structure and firm performance across different industries using a sample of french manufacturing firms. This study examined the impact of capital structure on firm performance of manufacturing sector smes in uk for the. Ownership structure, firm performance, and corporate governance. Our study is based on panel data of 225 firms, with approximately 1 observation per year. Board composition and firm performance diva portal.
A case of malaysia article pdf available in procedia social and behavioral sciences 2112015. Performance implication of ownership structure and. We distinguish between family firms, firms controlled by partnerships of individuals, concern controlled firms, and firms where blockholders have less than 50% of the vote. Capital structure, equity ownership and firm performance dimitris margaritis 1 and maria psillaki 2 revised april 2009 1 corresponding author department of finance, faculty of business, aut, private bag 92006, auckland 1020, new zealand. This paper examines the relationship between firms ownership structure and financial performance in. Specifically we test the effects of board meeting, board independence, board size and directors accounting expertise on firm accounting performance.
We find a nonlinear relationship between ownership structure and firm performance. Pdf board composition, ownership structure and firm. In addition, the impact of ownership structure on firm performance. Yet again, a financial crisis offers a unique opportunity to study the assumed to be wellknown relationship in a different, irregular environment. This thesis tries to answer the question whether ownership structure matters for firm performance. But the ownership structure has some association with firm performance. However, empirical results have failed to provide consistent evidence to prove whether the type of ownership does significant affect firm performance.
The purpose of this study is to examine the impact of capital structure on the performance of 192 firms listed on the stock exchange of kuwait, covering from year 2009 to 20. Firm performance, institutional ownership and capital structure. This paper investigates the role of board structure and the effect of ownership structures on firm performance in new zealands listed firms. Positive as well as negative relationships at differing levels of equity holdings by managers have been suggested by researchers leading to inconclusive results. Findings suggests that promoter controlled firms performance is better than manager controlled ones, but empirical.
The effect of ownership structure on firm performance has been the subject of research in numerous studies. The published analytical and empirical evidence on the impact of ownership structure on corporate performance is conflicting. Carroll school of management, boston college, chestnut hill, ma 021673808, usa received october 1991. Evidence from selected arab countries abstract the paper works with a sample of 304 firms from different sectors of the economy, and from a representative group of arab countries egypt, jordan, oman and tunisia where related data could be gathered.
Faculty of management and administrative sciences, university of gujarat. Conference paper pdf available april 2010 with 757 reads. Nowadays, the main issue for capital structure is how to resolve the conflict on the firms resources between managers and owners jensen, 1989. D k y abeywardhana the purpose of this study is to investigate empirically the impact of capital structure on firm performance. The empirical work analyzes data on 280 israeli firms and employs the technique of data envelopment analysis. Institutional ownership, capital structure, and firm.
Nigeria, using a sample of thirty listed companies. The objective of this paper is to extend the relevant empirical literature of the strategystructureperformance paradigm by comparing the resourcebased view rbv with contingency theory. The results of gls show that firm performance is positive and significantly related to five governmentlinked investment companies, foreign ownership, and dpiis ownership while it is negatively and. Capital structure, equity ownership and firm performance. After having analyzed the results, no significant associations between the proportion of independent directors in the board and firm performance were found. This paper presents an analysis of the association between eight categories of ownership, hhi index, gini index and firm perf. We examine the effect of ownership structure on firm performance, for firms listed on vietnamese stock exchanges, using 2744 firmyear observations over the period from 2007 to 2012. It links the corporate governance structure of a country as defined by its legal system to firms performance. Ownership structure characteristics and firm performance. There are several aspects and dimensions of corporate governance, which may influence a firms. This finding is consistent with the view that diffuse ownership, while it may exacerbate some agency problems, also yields compensating advantages that. Musallam college of business, universiti utara malaysia, kedah, 06010, malaysia abstract this paper aims to investigate and analyze the effect of ownership by different groups of investors on the. A study of listed firms in vietnam thesis submitted to the school of business of the university of western sydney in fulfilment of the requirements for the degree of doctor of business administration duc nam phung march 2015.
Evidence from malaysia plant anon firms by yong hooi ying the objective of the study is to examine the impact of the capital structure of firm performance in malaysia. Ownership structure, corporate diversification, and firm performance. Wald may 25, 2005 abstract we model ceo and director compensation using firm characteristics, ceo characteristics, and governance variables. Sloan school of management, massachusetts institute of technology.
Corporate ownership structure and firm performance ipedr. Board composition, ownership structure and firm performance article pdf available in research journal of economics and business studies 26 april 20 with 1,653 reads how we measure reads. We distinguish between family firms, firms controlled by partnerships of individuals. We find that family ownership is both prevalent and substantial. This paper aims to investigate and analyze the effect of ownership by different groups of investors on the performance of listed companies in malaysia for a period of ten years from 2000 to 2009. The starting point for the analysis is the agency theory by jensen and meckling 1976, which predicts that higher levels of managerial ownership structure increase firm performance due to an incentive effect. Pdf corporate ownership structure and firm performance. Pdf the impacts of ownership structure on firm performance. Corporate governance structures, legal origin and firm. The effect of ownership structure on firm performance in malaysia kamarun nisham taufilmohd, rohani md rus, sami r. The purpose of this study is to investigate empirically the impact of capital structure on firm performance. Performance implication of ownership structure and ownership concentration. Nov 25, 2015 the paper aims to examine the significant relationship amongst institutional stockholdings and firms performance as measured by roa, roe, pe, eps and capital structure as measured by long term debt to capital ratio of companies listed on the main board of bursa malaysia. Ownership structure, firm performance and capital structure.
Agency theory, executive compensation structure, and firm performance jensen and meckling 1976 argue that ownership structure, executive com pensation structure, and board composition are determined by each other and by the nature of a firms business e. Firm performance and legal origin aggregate patterns the legal origin hypothesis states that the performance of firms is related to the legal origin of their country of origin. Yet again, a financial crisis offers a unique opportunity to study the assumed to be wellknown relationship in. Ownership structure and acquiring firm performance an empirical analysis of minority expropriation caroline johansson emma nyberg abstract this study examines the relationship between ownership structure and acquiring firm performance in order to determine whether mergers and acquisitions are used as means of minority expropriation. This study investigates the relationship between types of ownership structure and firm performance and capital structure of malaysian ipos firms. Ownership structure, inside ownership and firm performance. Firm performance, market risk of stock, firmspecific risk, firm size book value of assets, the value of debt as a fraction of the book value of assets. The objective of this paper is to extend the relevant empirical literature of the strategy structure performance paradigm by comparing the resourcebased view rbv with contingency theory.
The aim of this thesis is to investigate the relation between ownership structure and firm performance. They found that no statistically significant relation between ownership structure and firm performance. Performance implication of ownership structure and ownership. The study uses panel data for seventeen 17 firms for the period 2001 2010 10 years. A study of vietnamese listed firms thi phuong vy le a thesis submitted in partial fulfilment of the requirements for the degree of doctor of business administration university of western sydney 2015. Ownership structure and firm performance wiley online library. Ownership structure, capital structure and firm performance. Ownership structure and corporate performance sciencedirect. Abstract this paper examines the impact of ownership structure on the financial performance of listed insurance firms in nigeria. Ceo compensation, director compensation, and firm performance.
For jcf special issue on corporate governance ivan e. Namazi and kermani2008 analyzed the impact of ownership structure on corporate performance of listed companies in tehran stock exchange. In the coming sections, an indepth explanation of the procedures employed in the study is provided. Pdf firm performance, institutional ownership and capital. Board structure, ownership structure and firm performance 47 important than ever for boards to revisit their size and determine the right number to carry out effective and responsible firm governance. Our study based on empirical evidence found that the. Executive compensation structure, ownership, and firm performance. Following demsetz and villalonga 2001 ownership structure and corporate performance, journal of corporate finance, 7, 209233, we model ownership. The connection between ownership structure and firm performance has attracted much attention, especially in emerging markets, yet yielded many inconsistent empirical results. Coles, daniel and naveen 2008 reexamine the ideal number for a. Ownership structure, corporate diversification, and firm. The effect of ownership structure on firm performance in malaysia.
Executive compensation structure, ownership, and firm performance hamid mehran wallace e. Stud ies show positive, negative as well as both positive and negative relationship at differin g levels of equity holdings by m anagers. The impact of ownership structure on the financial. The study examines the effect of ownership structure on firm performance. Institutional stock ownership and firms capital structure according to business week, u. Executive compensation structure, ownership, and firm.
The effect of ownership structure on firm performance in. The relationship between the various aspects of ownership structure namely ownership concentration. Agency theory and ownership structure estimating the. We find no statistically significant relation between ownership structure and firm performance. Evidence from china abstract we study the managerial ownershipperformance relationship by examining a unique sample of nonlisted chinese firms, of which the ownership structure is essentially exogenously determined subject to government policies irrelevant to incentive contracting. We distinguish between family firms, firms controlled by partnerships of individuals, concern controlled firms, and firms. Pdf this study examines the relationship between ownership structure and firm performance in chinese companies. We investigate the relation between foundingfamily ownership and firm performance. Pdf this study implies that diffuse ownership structure negatively affects firm performance. For both the effect of total ownership concentration on firm performance and the effect of insider ownership concentration on firm performance, two. Therefore, this study is an attempt to achieve this target as will provide below. The research is based on publicly traded firms listed on the stockholm stock exchange omx30, during the time period 20062011.
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