Search results
1 – 10 of over 2000
Emeka Steve Emengini, Shedrach Chinwuba Moguluwa, Johnson Emberga Aernan and Jude Chidiebere Anago
This paper aims to examine the impact of ownership structure on the accounting-based performance of listed Nigerian deposit money banks (DMBs) on Nigerian Exchange Group (NGX…
Abstract
Purpose
This paper aims to examine the impact of ownership structure on the accounting-based performance of listed Nigerian deposit money banks (DMBs) on Nigerian Exchange Group (NGX) from 2011 to 2020.
Design/methodology/approach
The study adopts ex post facto research design, using initially “the panel fixed and random effects regression analysis and Hausman specification test and thereafter, the IV Generalised method of moments (GMM) to check for endogeneity issues and strengthen the robustness of the results.
Findings
The one lagged value result reveals that ownership structure of DMBs in Nigeria has cumulative significant impact to influence corporate financial performance of the banks in the future. Overall, CEO, board/managerial, family, government and foreign ownership structures in DMBs in Nigeria do not have significant influence on accounting-based corporate financial performance of the banks. However, the study reveals that board/managerial ownership could significantly improve market value/growth of DMBs in Nigeria.
Practical implications
Policy makers, investors (both local and foreign), academics, corporate governance administrators, and the government could apply the study's findings to the management of banking operations in Nigeria.
Originality/value
The paper highlights the impact of five ownership structures on the accounting-based performance of DMBs in Nigeria from 2011 to 2020, providing valuable insights into the influence of stockholding categories on corporate financial performance, which is a shift from extant literatures with limited insights.
Details
Keywords
Jasmeet Kaur and Karamjeet Kaur
The purpose of the study is to analyse the influence of board composition and ownership structure on the dividend pay-out policy of selected listed Indian companies.
Abstract
Purpose
The purpose of the study is to analyse the influence of board composition and ownership structure on the dividend pay-out policy of selected listed Indian companies.
Design/methodology/approach
The top 30 companies listed on National Stock Exchange were examined for a period of three financial years from 2019 to 2021. Due to the cross-sectional and time-series character of the data, fixed effect panel model is used as the primary analytical approach.
Findings
The results revealed that there is a significant and positive association between board size and dividend policy. The results confirm that the firms with higher Indian ownership and non-institutional ownership distribute higher levels of dividend. No significant association was found between board independence and dividend decisions of ratios. Finally, it is observed that there is a positive impact of return on assets on dividend policy.
Research limitations/implications
Future studies can confirm the impact of ownership determinants and board characteristics on dividend distribution policy by taking stock dividends into account and enlarging the sample size of developing market businesses. They can also investigate ownership factors including management ownership and international ownership, in addition to other board attributes like qualification, tenure and age. This will offer a more thorough comprehension of how these variables relate to dividend policy.
Practical implications
Because they are better able to assess the financial position and make educated judgments, a diverse and independent board of directors may result in more strategic and cautious dividend policies. The dividend policy of a firm is also influenced by its ownership structure and strategic objectives; small or primary shareholders may exert pressure for larger payments. By focusing on long-term strategic goals rather than immediate requirements, managers may guarantee that interests are aligned. The findings of this study offer significant guidance to management and regulators about the dividend policy of publicly listed corporations.
Social implications
According to agency theory, the link between ownership structure, board composition and dividend policy may be explained by agency conflicts. Independent directors are necessary for the board to make decisions that effectively balance the interests of management and shareholders, particularly when it comes to paying dividends. According to studies, companies with non-executive directors have greater interest alignment and fewer agency issues. In addition, the ownership structure and makeup of the board are important factors in lowering agency conflicts and enhancing corporate governance procedures. Companies may improve their governance procedures and increase value for shareholders by resolving conflicts of interest.
Originality/value
The research paper contributes to the existing body of knowledge by analysing and uncovering significant and unknown relationship between board composition, ownership structure and dividend policy. The paper explores the relationship between specific ownership structures and dividend policy in context of a developing country where limited research exists and addresses a research question that has not been extensively studied before.
Details
Keywords
Sattar Khan, Naimat Ullah Khan and Yasir Kamal
This paper aims to examine the role of corporate governance (CG) in the earnings management (EM) of affiliated companies in family business groups (FBGs) listed on the Pakistan…
Abstract
Purpose
This paper aims to examine the role of corporate governance (CG) in the earnings management (EM) of affiliated companies in family business groups (FBGs) listed on the Pakistan Stock Exchange (PSX), using principal–principal agency theory.
Design/methodology/approach
The sample of 327 nonfinancial firms of the PSX, consisting of 187 group-affiliated firms and 140 nonaffiliated firms has been used in this study for the period of 2010 to 2019. The study uses different regression models for analysis, with robustness tests of various alternative measures of EM and FBG affiliation. In addition, endogeneity is controlled with the propensity score matching method.
Findings
The findings show that EM is less prevalent in affiliated firms compared to nonaffiliated companies. The results show a negative and significant relationship between FBGs affiliated firms and EM. Moreover, the results also show a positive relationship between EM and the interaction term of the CG index and group affiliation. It refers to the fact that effective governance cannot reduce EM in affiliated companies of FBGs as well as in the nonfinancial companies of the PSX. In addition, the quality of CG is higher in affiliated companies compared to its counterpart in nonaffiliated firms. The findings support the principal–principal agency theory that CG cannot mitigate the expropriating behavior of controlling shareholders against minority shareholders by reducing EM in emerging markets due to the ownership concentration phenomenon.
Research limitations/implications
This research study has implications for small investors, government agencies and regulators. The findings of the study show that CG code should make it mandatory for companies to reveal information about their complex ownership structure and ownership information about affiliated companies and directors. Furthermore, it is suggested to revisit the code of CG in the Pakistani context of principal–principal conflict instead of the agent–principal explanation of agency theory based on Anglo–Saxon countries.
Originality/value
This research study has contributed to the CG and FBG literature in relation to EM in idiosyncratic settings of Pakistan. One of the prime contributions of the paper is the development of a comprehensive CG index. This research study used detailed, manually collected novel data on affiliated firms of FBGs in Pakistan.
Details
Keywords
Faraj Salman Alfawareh, Mahmoud Al-Kofahi, Edie Erman Che Johari and Ooi Chai-Aun
This paper aims to examine the connection between digital payments, ownership structure, and bank performance in Jordan, as well as investigate the moderating role of the…
Abstract
Purpose
This paper aims to examine the connection between digital payments, ownership structure, and bank performance in Jordan, as well as investigate the moderating role of the independent director in the said relationship.
Design/methodology/approach
The study uses data from 12 Amman stock exchange-listed commercial banks, covering the period from 2010 to 2023. This paper employs econometric analysis of panel data, including ordinary least squares (OLS) regression as the primary approach, as well as the generalised method of moments, the two-stage least square (2SLS), and the dynamic model to deal with causality and endogeneity issues in the proposed equations. This ensures that the results are valid.
Findings
The results indicate that digital payments and ownership structure have a significant positive connection with bank performance. Additionally, the independent director variable appears to play a substantial and positive moderating role in the link between ownership structure (e.g. institutional ownership) and bank performance. These results strengthen and support the claims of agency theory and the information systems success model.
Practical implications
Overall, this research helps stakeholders, bankers, managers, investors, customers, and policymakers, identify the influence of digital payment and ownership structure on bank performance in developing economies such as that of Jordan.
Originality/value
This investigation offers a unique understanding by illuminating how digital payment and ownership structure affect bank performance in a developing country such as Jordan. Additionally, it opens avenues for future research to delve into this literature domain in North African and Middle Eastern nations, with a particular focus on Jordan. This investigation is among the initial explorations in Jordan that aim to elucidate these relationships. On the theoretical level, it adds to the agency theory and IS model. It provides new insights into the dynamics of industry banking in developing nations (i.e. Jordan).
Details
Keywords
Arindam Mondal and Amit Baran Chakrabarti
Information and communication technologies (ICT) are indispensable tools for Knowledge Management (KM) practices in today’s knowledge-intensive and globally interconnected…
Abstract
Purpose
Information and communication technologies (ICT) are indispensable tools for Knowledge Management (KM) practices in today’s knowledge-intensive and globally interconnected marketplace. This paper seeks to investigate the impact of family ownership on ICT investments in an emerging economy (EE) context.
Design/methodology/approach
This empirical paper uses data from 300 large Indian listed firms with 2,650 observations in the period 2008–2017, to test its hypothesis.
Findings
The results indicate that family firms are not favourably inclined towards ICT investments for formalizing their KM practices. However, under certain contexts, such as higher foreign institutional ownership or business group affiliation, they are more willing to invest in ICT resources.
Practical implications
This study establishes a nuanced understanding of how family firms approach ICT investments and KM practices. This research can help family owners/managers to commit sufficient resources on ICT projects.
Originality/value
Literature on KM has largely emanated from developed countries. This is one of the first papers from an EE context that studies the impact of family ownership on ICT investments and subsequent KM practices. In this way, this paper offers specific insights into the context of Indian family firms and offers some interesting findings that can contribute to the literature, policy and practice.
Details
Keywords
Abdallah A.S. Fayad, Arifatul Husna Binti Mohd Ariff, Sue Chern Ooi, Ali H.I. Aljadba and Khaldoon Albitar
This paper aims to explore the role of ownership structure on integrated reporting quality (IRQ) in an emerging market.
Abstract
Purpose
This paper aims to explore the role of ownership structure on integrated reporting quality (IRQ) in an emerging market.
Design/methodology/approach
This study includes a sample consisting of 64 firms from Bursa Malaysia, with 173 firm-year observations from 2017 to 2020. Feasible Generalised Least Square model has been used to test the hypotheses.
Findings
The findings show that government ownership has a positive effect on IRQ and that the integrated reports and <IR> framework are well aligned. Foreign ownership influences IRQ positively. However, the results did not support the effect of family ownership on IRQ as hypothesised.
Practical implications
The findings of this research hold practical implications for companies and regulators in Malaysia. The results demonstrate to investors that both government and foreign ownership have a positive impact on IRQ. Therefore, investors can make well-informed investment decisions regarding companies with a high level of government or foreign ownership.
Originality/value
To the best of the authors’ knowledge, this is the first paper to explore the effect of ownership structure on IRQ in the Malaysian context.
Details
Keywords
Pedro Torres, Pedro Silva and Mário Augusto
The effects of ownership concentration on firm performance usually considers two conflicting perspectives: monitoring and expropriation hypotheses. Past studies have produced mix…
Abstract
Purpose
The effects of ownership concentration on firm performance usually considers two conflicting perspectives: monitoring and expropriation hypotheses. Past studies have produced mix findings. This study aims to shed light on this relationship by focusing on a specific measure of firm performance, firm growth. The moderating effect of industry growth in the aforementioned relationship is also considered, which advances knowledge on the role of moderators.
Design/methodology/approach
This study resorts to data from a sample of 21,476 Portuguese firms, which is examined using hierarchical linear modelling. This approach is adequate because the data has a hierarchical structure: the firms are nested within industries.
Findings
The results show that equity ownership concentration has a positive effect on firms’ growth and that industry growth amplifies this relationship. Ownership concentration can spur effective monitoring, thereby alleviating principal–agent conflicts of interest and speeding up decision-making, enabling timely competitive actions that promote growth.
Research limitations/implications
The research conceives ownership structure in two groups. However, equity ownership concentration often acquires more complex shapes. In addition, the data used is from a single country.
Practical implications
The results show that firms pursuing growing strategies and operating in growing industries benefit from equity concentration.
Originality/value
Different from past studies, this study focuses on firm growth performance and considers the moderating effect of industry growth.
Details
Keywords
Sofia Brunelli, Luigi Vena, Salvatore Sciascia and Lucia Naldi
This paper explores the drivers and inhibitors of the transition of entrepreneurial family firms from small to large firms. We adopt two contrasting theoretical perspectives, i.e…
Abstract
Purpose
This paper explores the drivers and inhibitors of the transition of entrepreneurial family firms from small to large firms. We adopt two contrasting theoretical perspectives, i.e. agency and stewardship, to explore the effects of family power on size transition.
Design/methodology/approach
We adopted an original research design that leverages a unique longitudinal database built starting from the list of the 500 best Italian manufacturing family firms published by the AUB Monitor in 2018. Specifically, we tested our hypotheses using a comprehensive set of financial and governance data from 89 Italian manufacturing family firms covering a 10-year period. To test our hypotheses, we conducted a survival analysis using a Cox regression.
Findings
We find an inverted U-shaped relationship between family involvement in ownership and size transition: size transition is more likely to happen at intermediate levels of family involvement in ownership. Additionally, our analysis shows that family involvement in the board of directors negatively impacts size transition, while the presence of a family CEO has a positive influence.
Originality/value
To the best of our knowledge, this study represents the first exploration of the phenomenon of size transition within entrepreneurial family firms. We believe it was worthwhile for two reasons. First, small size is frequently regarded as a weakness when competing in international markets, investing in R&D, or rewarding shareholders. Second, since small family firms are the major contributors to the world economy, understanding the factors that facilitate their transition to large firms can have a significant impact on overall economic development and prosperity.
Details
Keywords
Zoltán Kárpáti, Adrienn Ferincz and Balázs Felsmann
The purpose of this paper is to identify different types of resource and capability configurations among Hungarian family and nonfamily firms and explore which compositions can be…
Abstract
Purpose
The purpose of this paper is to identify different types of resource and capability configurations among Hungarian family and nonfamily firms and explore which compositions can be considered competitive. In a rivalrous, dynamic world, understanding which sets of resources and capabilities lead to a higher level of competitiveness is vital.
Design/methodology/approach
This paper is based on a quantitative competitiveness survey carried out between November 2018 and July 2019 in Hungary. The authors used the Firm Competitiveness Index (FCI) to measure competitiveness and the resource-based view (RBV) approach to understand which configurations of resources and capabilities are responsible for a higher level of competitiveness based on 32 variables. An exploratory factor and cluster analysis were conducted to analyze the ownership's effect on firm competitiveness. The final sample size contained 111 companies, of which 53 were identified as family and 58 as nonfamily firms.
Findings
Factor analysis reveals five factors determining resources and capabilities: “operational,” “leadership,” “knowledge management,” “transformation” and “networking.” Based on these factors, the cluster analysis identified five groups in terms of types of family and nonfamily firms: “Lagging capabilities,” “Knowledge-based leadership,” “Innovativeness and transformation-oriented management,” “Relationship-oriented management” and “Business operation-oriented management.” Results show that nonfamily businesses focus on operational and leadership capabilities, reaching a higher FCI than family businesses, which are likely to invest more in their networking, transformation and knowledge management capabilities.
Originality/value
By defining the different configurations family and nonfamily firms rely on to reach competitiveness, the paper applies an essential element to the Hungarian and Middle Eastern European contexts of family business research. The findings contribute to developing family business literature and point out specific resources and capabilities family firms should focus on to shift toward reaching a higher level of professionalization and competitiveness. The characterization of different types of competitiveness comparing family and nonfamily firms enables the firms to assess customized implications.
Details