Search results

This study aims to investigate the impact of family management and ownership structure, including foreign ownership and business group ownership, on corporate performance.

Using an agency perspective and a quantitative research methodology, this study examines listed firms in Pakistan from 2009 to 2018.

The results suggest that family management and concentrated leadership constrain, whereas family leadership, foreign ownership and group ownership strengthen monitoring effectiveness and corporate performance. These findings imply that the shareholder governance logic offers optimal solutions in an emerging economy, as relational governance may activate agency problems.

The findings are consistent with the relevance of relational governance mechanisms in the form of family leadership. However, the results suggest that emerging economies require a hybrid governance model to address their unique agency problems, thereby underlining context relevance in corporate governance scholarship. Furthermore, this research adopts a thick view of institutions to clarify institutional embeddedness and corporate governance contextuality in an emerging economy.

After the precipitated decline of the Soviet Empire and its satellite states, a system change seemed to be called for, and many countries embarked on social and political reforms focussing on property structures in the economy. This raised the issue of governance in the institutions that would constitute the structures in which production would have to take place. In particular, some Central European countries opted for mass privatisations of the means of production, on the face of it so as to have the people participate in the wealth of the nation. In fact, the wealth of the nation depends on the structures in which it is constituted. Dissipation of property rights will reduce the value of the nation's productive capital, whereas an intelligent structure that creates good governance structures at the same time, increases the value of the producing capital. This relatively simple insight lies at the heart of our understanding of how to analyse different processes of mass privatisation. This essay develops a theoretical framework by which different governance structures can be analysed. The framework consists of a blend of the economic theory of property rights, new institutional economics and Austrian economic theory.

Because of growing corporate tax scandals, there is an enhanced focus on corporate taxation by governments, institutions and the general public. Transparency in tax matters has been identified as critical for effectively managing and promoting socially responsible tax behaviour. This study aims to explore the impact of ownership structure, board and audit committee characteristics on corporate tax responsibility (CTR) disclosure.

This research collected data from the annual reports of Pakistani-listed firms over 12 years, from 2009 to 2020. Consequently, the data set encompasses a total of 1,800 firm-year observations. This study uses regression analysis to test the relationship between corporate governance and CTR disclosure.

The results show that board gender diversity, managerial ownership and audit committee independence promote tax responsibility disclosure. In contrast, family board membership, CEO duality, foreign ownership and family ownership negatively impact tax responsibility disclosure. Additional analyses reveal the specific information categories that produce the overall effects on tax responsibility disclosure and assess the moderating impact of family firms on the governance and CTR disclosure nexus.

Corporations can use the results to encourage practices that enhance transparency and improve the quality of disclosures. Regulatory authorities can use the findings to stipulate better protocols. Doing so will be vital for developing countries such as Pakistan to improve tax revenue and cultivate economic growth.

While this research represents, to the best of the authors’ knowledge, one of the first empirical investigations of the association between corporate governance and CTR, the results contribute to the corporate governance literature and offer fresh insights into CTR, an emerging dimension of corporate social responsibility.

Previous studies that dealt with corporate governance have witnessed gradually significant growth that created some new trends. The purpose of this paper is to be involved in such trends through examining the link between ownership structure as one of the important corporate governance mechanisms and firm performance in Jordan as one of emerging economies.

The current study used the multiple regression method to analyze available data for non-financial firms listed in the Amman Stock Exchange for the fiscal year 2012.

The findings revealed that managerial ownership has a positive impact on performance. On the other hand, the findings surprisingly showed no evidence to support the impact of foreign ownership on performance. Moreover, there is a significant evidence to support the fact that company size has no impact on firm performance. The findings also revealed that industry type has no impact on firm performance.

The practical implications of the current study demonstrated that good corporate governance is imperative to all organizations and must be encouraged for the interest of all stakeholders. Unlike the majority of the previous studies, the current study unexpectedly found that foreign ownership is not significantly contributing to the firm performance. Thus, Jordanian Government and other related/responsible parties should formulate policies for the foreign investors.

Interestingly, from developed and developing countries perspective, the study is the first of its kind that exclusively chose the mechanisms of ownership structure in its relationship with firm performance represented by market share, where no previous study has tested foreign ownership in such relationship. In that, this study is the first study in emerging economies to investigate such a link. Such new insights on this relationship by current study provide helpful information that is of great value to the government, academics, policy makers, and other stakeholders.

For decades the majority of contributions to governance practice have been compliance-focused while much governance research has been grounded in an agency view (Daily, Dalton & Rajagopalan, (2003), Academy of Management Journal, 46(2), 151–158). Much of that effort has failed to observe the key drivers of boardroom decision making. The objective of this research was to explore the shareholder–stakeholder tension within an organisation as it progressed through sequential forms of ownership. The results presented in this paper are primarily drawn from the immediate ex poste and ex ante events surrounding the collapse of Ansett Holdings Ltd and the latter government bailout of Air New Zealand. New Zealand's national airline provided a relevatory case (Yin, (1989), Case study research: Design and methods (Rev.ed.). Newbury Park, CA: Sage), the opportunity to study a phenomenon previously inaccessible to research, because data hitherto unavailable ‘entered’ the public domain. However, when reinterpreted in light of direct input from key executives involved – benevolent informants – much of that data needs to be reconsidered to better understand why critical decisions were made. The Ansett collapse subsequently became the single largest corporate collapse in Australian history while the loss to Air New Zealand became New Zealand's largest-ever corporate loss. The decision by Brierley Investments Limited (BIL) to ‘block’ Singapore Airline's (SIA) entry into the Australian market, implemented through the high risk acquisition of the balance of Ansett, directly resulted in both ‘collapses’. Decisions by the organisation's governance were found to have a direct impact on the performance of Air New Zealand through various phases of its ownership. While the ‘collapses’ are attributed to a failure of governance to act in the organisation's (stakeholders) interests. Growing tensions between shareholders and stakeholders were observed to be suppressed as the BIL dominated and led Board achieve complete control over decision making. There remains considerable opportunity to further governance research through the examination of business ethics, notably the view that appropriate ethics can be met by way of legislation (e.g. Diplock, (2003, April), Corporate governance issues. Securities Commission of New Zealand. Available from: http://www.sec-com.govt.nz/speeches/jds240403.shtml). However, the role of governance, particularly whom it is there to serve requires far greater attention on behalf of researchers. In the cases of Ansett and Air New Zealand the Board ceased to act in best interests of the organisation in favour of the major shareholder.

The purpose of this study is to examine corporate governance practices in an emerging economy. It focusses on how ownership control and board control systems operate in corporate organisations in an emergent economy, assuming that these systems are essential for enhancing good corporate governance practices in emerging countries.

The paper builds on descriptive multiple-case study with multiple units of analysis to divulge how ownership control and board control systems function to ensuring effective corporate governance in publicly listed corporate organisations in Ghana. A criterion-based sampling technique is used to select the companies. Thereafter, three techniques of data collection are used to gather data from the companies: archival records, semi-structured interviews and observation.

By linking the gathered data to the paper’s theoretical propositions, the study highlights that all the companies are characterised by the presence of large shareholders, and, in consequence, they tend to exert extensive control over the activities of the companies through their involvement in the decision-making processes. However, whilst the presence of large shareholders has the tendency to solve the agency problem, it poses challenges in regards to minority shareholders’ interests in these corporate organisations. The study also reveals that boards of directors tend to exercise control over corporate organisations when majority shareholders stop interfering in their dealings. This implies that when major shareholders fully partake in corporate decision-making processes of companies, boards of directors seem to be sheer advisory bodies to management.

This is a paper to shed light on corporate governance practices in four large publicly listed corporate organisations on the Ghana Stock Exchange, so the observable facts do not apply to other emergent economies. In addition, the sample does not represent all corporate organisations in Ghana; thus, the empirical observations cannot be generalised to other organisations that have not been included in this study. However, the empirical results can be applied to other similar corporations in Ghana and other emergent economies in an analytical sense. With the application of inductive reasoning, the results can be applied to provide important appreciation in an effort to understand the structure of corporate governance practices in organisations in developing countries.

A comparative analysis of the empirical observations from this study and the recommended guidelines of corporate governance of Ghana has been carried out, and aspects in which organisations need to reform and improve to fully comply with the guidelines are highlighted: director independence, director evaluation, introduction of new directors and board education. This could possibly be the foundation upon which corporate governance structures in these organisations can be restructured and further enhanced.

The majority of the studies of corporate governance in emergent economies have used quantitative techniques to examine the relationship between corporate governance mechanisms and firm performance. However, this study takes a different approach to examine corporate governance practice in an emergent economy by using a comprehensive and defensible qualitative analysis to examine relations between ownership structure and shareholder control, and board of directors and board control. In addition, it highlights how ownership and board control systems interact in corporate organisations in emergent economies.

This study explores whether product market competition is a substitute for or complementary to good internal governance through promoter holdings. Specifically, it examines the impact of product market competition on the linkage between promoter ownership and firm value and investigates whether this impact varies with the type of blockholders and level of ownership.

The authors used a fixed-effect panel regression method to analyze 1,136 National Stock Exchange-listed firms with 10,770 observations between the years 2005 and 2017. The authors computed product market competition using the Hirschman–Herfindahl Index and used the two-stage least squares regression model to address the issue of endogeneity.

Competition is a substitute for good corporate governance, especially in highly competitive industries, while promoters enhance firm value only in less competitive industries. This supports the theory that competition hinders a manager's “quiet life” hypothesis and creates disciplinary pressure to perform well. Additionally, the authors find that competition acts as a complement to promoters who are state-owned blockholders, while it acts as a substitute for promoters who are family-owned and private-owned blockholders.

This is possibly among the earliest attempts to integrate promoter ownership, product market competition, and firm value with the type of blockholder, especially in the context of the Indian market after 2005. The authors also provide evidence of situations in which both external and internal governance mechanisms either synergize or mitigate each other.

An effective corporate governance system helps to smoothly run business operations and manage financial matters. To ensure that management behavior is ethical, and their decisions are in the best interest of shareholders, corporate governance plays a vital role. This study aims to examine the impact of corporate governance on the insider trading profitability of listed banks in Pakistan, Bangladesh and India.

The authors take data from the financial statements of 70 listed banks and stock exchanges of the respective countries. The period of the data for our study is from 2010 to 2020. The authors use board independence, the board size, institutional ownership and managerial ownership as measures of corporate governance characteristics. While inside trading profitability is measured with abnormal returns. The authors apply the fixed effect panel regression for hypothesis testing and the two-step dynamic panel system-generalized method of moments (GMM) regression technique for checking the robustness of the findings.

The authors found that corporate governance has a significant impact on insider trading profitability in Pakistan, Bangladesh and India. Board independence and institutional ownership are negatively related while board size and managerial ownership are positively associated with insider trading profitability.

To the best of our knowledge, this study is the first one to explore the role of corporate governance in limiting insider trading on South Asian banks. It recommends that corporations should follow the code of corporate governance for the protection of shareholders' and other investors' profits.

This paper aims to investigate the impact of ownership structure on dividend policy of listed firms in Turkey. Particularly, it attempts to uncover the effects of family involvement (through ownership and board representation), non-family blockholders (foreign investors, domestic financial institutions and the state) and minority shareholders on dividend decisions in the post-2003 period as it witnesses the major economic and structural reforms.

The paper uses alternative dividend policy measures (the probability of paying dividends, dividend payout ratio and dividend yield) and uses appropriate regression techniques (logit and tobit models) to test the research hypotheses, by focusing on a recent large panel dataset of 264 Istanbul Stock Exchange-listed firms (non-financial and non-utility) over a 10-year period 2003-2012.

The empirical results show that foreign and state ownership are associated with a less likelihood of paying dividends, while other ownership variables (family involvement, domestic financial institutions and minority shareholders) are insignificant in affecting the probability of paying dividends. However, all the ownership variables have a significantly negative impact on dividend payout ratio and dividend yield. Hence, the paper presents consistent evidence that increasing ownership of foreign investors and the state in general reduces the need for paying dividends in the Turkish market.

Because of the absence of empirical research on how ownership structure may affect dividend policy and the data unavailability for earlier periods in Turkey, the paper cannot make comparison between the pre-and post-2003 periods. Nevertheless, this paper can be a valuable benchmark for further research.

The paper reveals that cash dividends are not used as a monitoring mechanism by investors in Turkey and the expropriation argument through dividends for Turkish families is relatively weak. Accordingly, the findings of this paper may benefit policymakers, investors and fellow researchers, who seek useful guidance from relevant literature.

To the best of the authors’ knowledge, this paper is the first to examine the link between ownership structure and dividend policy in Turkey after the implementation of major reforms in 2003.

The paper examines the differential impact of various firm characteristics on firm value across various threshold levels of foreign ownership.

Using a panel of 408 Indian publicly listed companies for the period during 2010–2018, a fixed-effect panel threshold regression model is adapted to study the threshold effects between foreign ownership and firm value. Tobin's Q is used as a proxy for firm value.

The study identifies three threshold levels, that is, four threshold regions in which foreign ownership changes its slope considerably. Various firm characteristics impact firm value differently in these four regions.

The study employs observations of the past nine years on variables identified as firm characteristics impacting firm value. Some variables are dropped due to the problem of multicollinearity. The employed variables may not be exhaustive in nature.

The present study implies that there exists no impact of foreign ownership on the value of the firm. Foreign investors invest for financial considerations and not with the objective of governing the firms. The governance effect of foreign investments is negligible, so their activism in the firms needs to be encouraged.

The study employs a novel approach to study the impact of foreign ownership on firm value applying fixed effect panel data threshold regression, considering foreign ownership as a proxy of corporate governance.