IMPACT OF OWNERSHIP STRUCTURE AND GROWTH OPPORTUNITY ON RISK-TAKING BEHAVIOR IN FAMILY FIRMS: EVIDENCE FROM PAKISTAN

Abstract

The primary objectives of our study is to explore the association between ownership structure (Family ownership and ownership concentration) with risk taking of the firms in listed firms of the Pakistan. Our study uses the data 60 firms listed in Pakistan stock exchange for the period of five years 2013-2017. In this study pooled OLS with Random Effect Panel regression method are used to examine the relationship between the risk-taking behavior and ownership structure. Overall results suggest that ownership concentration has significant and negative relationship with risk taking behavior of the firms. Firm size has negative relation it means that large firms has various resources in shape of the human resource that has skillful in maintain the risk by also taking the advices of the experts. Growth opportunity has significant and positive relationship with risk taking. With the addition of the moderation variable family ownership these relationship between the dependent and independent variables of the research makes strong. In Pakistan there is few researches works on the ownership structure and risk behavior especially on the ownership concentration and family ownership. In our research family ownership taken as a moderator because in mostly Asian countries has family and institutional owned firms.