Abstract
The purpose of this study is to analyze trends of non-financial corporations listed on Borsa Istanbul (BIST) in terms of ownership structure for the period of 2002-2019. According to our findings, Turkish non-financial corporations reveal a concentrated nature as an example of family capitalism. Findings also reveal that initial public offerings are mainly from family-controlled corporations. This is noteworthy as corporations integrate more to the capital markets of Turkey. Besides, they get more disciplined as they subject to the regulations of the governing bodies and internalise corporate governance criteria. In terms of ownership mix, findings denote that non-financial corporations listed on BIST benefit from the advantages of conglomerates, cross-ownership, and foreign ownership in line with the literature. Contrary to several emerging economies, state-ownership has a minor share which renders strength and quality of governance level. The concentrated nature of corporations is believed to have a positive effect on governance mechanisms for controlling agency problems especially in the environment of uncertainty during COVID-19. Although Turkish capital markets have promising and progressing corporate governance mechanisms, steps to build up advanced digital governance mechanisms for the “digital new normal” should be taken as soon as possible.
Highlights
Stock markets are important distinguishing factors of financial systems
Turkish non-financial corporations reveal a concentrated nature as an example of family capitalism
Findings reveal that initial public offerings are mainly from family-controlled corporations
Summary
Stock markets are important distinguishing factors of financial systems. In most cases, they function as tools to take the pulse of economies. Berle and Means (1932) examined conflicting interests by separating corporate ownership from corporate management which is referred to as the separation of ownership and control Authors argued that this separation enables executives to act in their self-interest rather than the interest of shareholders (Gillan & Starks, 2003). Jensen and Meckling (1976) defined agency cost as a combination of monitoring costs beared by the principal, bonding cost beared by agents, and residual loss that arise from the gap between the two They note that agency cost may emerge in any situation that requires cooperative action between parties. They pointed out the conflict of interest between stockholders and managers as an example of agency cost by underlining the close interaction of separated ownership and control and agency problem
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