Corporate Ownership Structure Research Articles

CEO power and corporate tax avoidance in emerging economies: does ownership structure matter?

PurposeThe purpose of this paper is to study how CEO power impact corporate tax avoidance. In particular, this paper aims to empirically examine the moderating impact of institutional ownership on the relationship between CEO power and corporate tax avoidance.Design/methodology/approachThe multivariate regression model is used for hypothesis testing using a sample of 308 firm-year observations of Tunisian listed companies during the 2013-2019 period.FindingsThe results show that CEO power is negatively associated with corporate tax avoidance and that institutional ownership significantly accentuates the CEO power’s effect on corporate tax avoidance. This implies that CEOs, when monitored by institutional investors, behave less opportunistically resulting in less tax avoidance.Practical implicationsOur findings have significant implications for managers, legislators, tax authorities and shareholders. They showed that CEO duality, tenure and ownership can mitigate the corporate tax avoidance in Tunisian companies. These findings can, hence, guide the development of future regulations and policies. Moreover, our results provide evidence that owning of shares by institutional investors is beneficial for reducing corporate tax avoidance. Thus, policymakers and regulatory bodies should consider adding regulations to the structure of corporate ownership to promote institutional ownership and consequently control corporate tax avoidance in Tunisian companies.Originality/valueThis study differs from prior studies in several ways. First, it addressed the emerging market, namely the Tunisian one. Knowing the notable differences in institutional setting and corporate governance structure between developed and emerging markets, this study will shed additional light in this area. Second, it proposes the establishment of a moderated relationship between CEO power and corporate tax avoidance around institutional ownership. Unlike prior studies that only examined the simple relationship between CEO power and corporate tax avoidance, this study went further to investigate how institutional ownership potentially moderates this relationship.

Tunnelling Behavior: Exploring Corporate Governance and Ownership Structure

This paper investigates the impact of corporate governance quality and ownership structure on tunnelling behaviour in Indonesia, specifically examining the moderating effect of the number of subsidiaries. The study utilized quantitative research methods and secondary data from the Indonesia Stock Exchange, company websites, and relevant journals. The sample consisted of 474 observations from listed companies on the IDX, excluding non-financial firms, covering the period from 2016 to 2019. Statistical analyses, including Pearson Correlation, OLS Regression, and Moderated Regression, were conducted using STATA 14.2 software. The results indicate that managerial ownership, government ownership, and corporate governance quality positively influence tunnelling behaviour, while domestic ownership has a negative impact. Foreign ownership, on the other hand, does not significantly affect tunnelling behaviour. Notably, the number of subsidiaries strengthens the relationship between corporate governance quality and tunnelling behaviour.

The impact of corporate governance and ownership structure on the capital structure decisions of Saudi listed firms

The impact of corporate governance and ownership structure on the capital structure decisions of Saudi listed firms

Corporate Governance and Ownership Structure Effect on Corporate Social Performance: Evidence from Non-Financial Industries of Pakistan

This paper will examine the diversified associations between corporate governance and ownership structure impact on corporate social performance in dissimilar industries across Pakistan non-financial. The OLS models regression are estimation to using data from 2011 to 2020, that the non-financial industries of Pakistan. Corporate governance including board independence (BINDP), board size (BSIZE), and audit size and committee (A&COM), and structure ownership including, ownership managerial (MOWN), ownership family (FOWN), and ownership concentration (COWN), inspires of organizations corporate social performance with environmental and social risk market capitalization. Generally, the outcomes significant of ownership structure and corporate governance is recognized in industries of non-financial different at a joint level while examines the organizations with a risk whole risk market capitalization disclosure. That suggest to identifying the ownership structure and corporate governance can risk mitigate the market capitalization disclosure non-financial industries in term of correlation the corporate social performance improving and the developed the benefits with the calculation of identical female director in women on board and family ownership organizations (independent or executive) to the panel. This study also demand consideration to the corporate governance and improve structure ownership to enhance the corporate social responsibility in industries non-financial with market risk capitalization analysis, whereas risk control performance of industries analysis after complement by critical mass and independent directors properties.

The Role of Corporate Social Responsibility, Ownership Structure, and Gender Diversity in Firm Performance

Corporate social responsibility (CSR) is now at the heart of corporate sustainability, and as such should have a significant impact on firm performance. However, the ownership structure (OS) is one element in the inner functioning of corporate governance (CG). Further, diversity by gender is one of the variables affecting FP. This paper examines the impact of CSR, ownership structure and gender diversity on FP. That is, we use panel data from non-financial firms in South Asian economies. Data for the years 2010-2022 are drawn from players 'DataStream. We use fixed effect, GMM (generalized method of moments) analysis and propensity score matching to study the data. However, we discover CSR and ownership concentration as well as institutional ownership and gender diversity have positive impacts on FP. study provides the policy implications for both investors and firms. As FP increases with more CSR activities, investors prefer to invest in firms that are more socially connected. Firms should provide more chances to the women on the board to improve performance. Further, ownership structure helps to overcome agency costs, therefore, investors are more attracted to provide funds to the firms that have a higher share of concentrated and institutional ownership.

Assessing the risk of profit shifting among the suppliers to Danish municipalities

PurposeAn increasing number of Danish municipalities wish to minimize tax avoidance due to profit shifting in their public procurement. To facilitate this effort, this study aims to develop a firm-level indicator to assess the potential risk of profit shifting (PS-risk) from Danish subsidiaries of multinational corporations to subsidiaries in low-tax jurisdictions.Design/methodology/approachDrawing from previous research, PS-risk is assumed to depend on the maximum difference in the effective corporate tax rate between the Danish subsidiary and other subsidiaries under the global ultimate owner, in conjunction with the tax regulations relevant to profit shifting. The top 400 contractors in Danish municipalities from 2017 to 2019 are identified and their relative PS-risk is estimated by combining information about corporate ownership structure with country-specific information on corporate tax rates, tax regulations and profit shifting from three independent data sets.FindingsThe PS-risk estimates are highly significantly positively correlated across the data sets and show that 17%–23% of the total procurement sum of the Danish municipalities has been spent on contracts with corporations having a medium to high PS-risk. On average, PS-risk is highest for large non-Scandinavian multinational contractors in sectors such as construction, health and information processing.Social implicationsDanish public procurers may use the indicator to screen potential suppliers and, if procurement regulations permit, to ensure high-PS-risk bidders document their tax practices.Originality/valueThe PS-risk indicator is novel, and to the best of the authors’ knowledge, the analysis provides the first estimate of PS-risk in Danish public procurement.

선택적 CSR과 외부주주의 감시에 대한 연구

Purpose – This study seeks to explore the impact of outside shareholders on CSR, and discuss how outside shareholders interact with corporate ownership structure to affect CSR. Design/Methodology/Approach – Using longitudinal data from 297 publicly listed companies in Korean large business groups, the study examined the direct and interaction effects of outside shareholders and corporate ownership structure on CSR. It focused on the impact of institutional stockholders holding 5% or more of the equity shares and foreign investors on corporate governance. Findings – While institutional investors do not significantly affect CSR, foreign investors have a positive impact and moderate the effects of corporate ownership structure on CSR. They respectively moderate the positive impact of controlling shareholder ownership and the negative impact of control-ownership disparity on CSR. These findings suggest that foreign investors play a role as independent monitors in aligning corporate governance with CSR objectives in large Korean business groups. Research Implications – The findings highlight the possibility of CSR being exploited for private benefits by controlling shareholders without effective corporate governance. This study emphasizes the need for monitoring and balanced oversight in reducing conflicts over CSR, suggesting the importance of outside shareholder engagement in corporate governance. It posits that outside shareholders, particularly foreign investors, are instrumental in fostering responsible corporate governance and CSR practices.

Ownership structure and climate-related corporate reporting

ABSTRACT We investigate the impacts of various types of corporate ownership structures (i.e. institutional, government, and managerial ownership) on climate-related corporate reporting as reflected in the levels of voluntary carbon disclosure. Using a sample of S&P 500 companies from 2015 to 2020 across both environmentally sensitive and non-environmentally sensitive industries, we find that diverse ownership structures have distinct impacts and preferences in corporate carbon disclosure. Specifically, government ownership is likely to promote transparency of carbon information. In contrast, the ownership held by institutional investors (total, short-term, and long-term), managers (i.e. CEOs, directors), and block-holders are negatively associated with the proactive greenhouse gas disclosure. We also find evidence that climate governance quality plays a positive moderating role in the relationship between two ownership types (i.e. long-term institutional investors and block-holder) and a firm’s climate-related corporate reporting. Our findings offer some practical insights for managers, regulators, and policymakers to focus on the configuration of corporate ownership in the context of improving green practices.

The Effect Of Corporate Board And Ownership Structure On Financial Performance

The study aims to investigate the effect of corporate board and ownership structure on company financial performance during the COVID-19 pandemic, focusing on industries highly affected in Indonesia and Singapore. Using quantitative methods, such as Multiple Linear Regression and considering firm size as a control variable, the study selected a sample through purposive sampling from the listed companies on IDX and SGX. It analysed secondary data from their annual reports between 2018 and 2020. The results show that the board size, board meetings, and managerial ownership positively and significantly affect the company's financial performance in the COVID-19 period. In Indonesia, board size and meetings positively affect a company's financial performance. In Singapore, institutional ownership and managerial ownership have a positive significance on corporate financial performance. Firm size significantly impacts company financial performance for countries in general and Indonesia, while Singapore has the opposite result.

Corporate Governance, Ownership Structure and Performance of Oil and Gas Firms in Nigeria: A GMM Analysis

The Routledge Handbook of Environmental Accounting, a 2020 publication by Taylor and Francis Group, presents a comprehensive overview of environmental accounting. This review focuses on a specific chapter titled "An Overview of Legitimacy Theory as Applied Within the Social and Environmental Accounting Literature." Deegan's chapter explores the definition of legitimacy theory, emphasizing the alignment of a company's values with societal values and the distinction between actual and perceived legitimacy. Notably, the absence of discussion on 'greenwashing,' a prevalent concern, raises questions. The chapter delves into the interplay of social contract and legitimacy theory, introducing the concept of a 'legitimacy gap.' It highlights manifestations through societal shifts and the 'organizational shadow'. Strategies for companies to manage legitimacy are outlined, acknowledging a lack of empirical evidence. Historical perspectives on legitimacy theory in environmental reporting are discussed, critiquing the reliance on outdated studies. Deegan enumerates criticisms of legitimacy theory, suggesting a section title change to 'Gaps in the Literature.' Despite shortcomings, the chapter provides valuable insights for experienced scholars navigating the intricacies of legitimacy theory in environmental accounting.

THE IMPACTS OF CORPORATE GOVERNANCE MECHANISMS AND OWNERSHIP STRUCTURE ON CAPITAL STRUCTURE OF CHINESE DUAL-LISTED COMPANIES

This research aims to assess how the mechanisms of corporate governance and ownership structure affect the capital structures of Chinese dual-listed companies that list their shares in the China A-share market and the Hong Kong market simultaneously from 2003 to 2019. A binary variable of state control firm attribute is introduced to proxy the political connection to the Chinese government. Both the independent director ratio and CEO duality are negatively and significantly associated with the long-term debt ratio. The board size negatively and significantly relates to the short-term debt ratio. Evidence of board members’ avoidance of investors’ pressure to use more debt and escape from debt lenders’ monitoring is observed in this research. Both foreign ownership and state ownership are significantly and negatively associate with the short-term debt ratio, but significantly and positively associate with the long-term debt ratio. Thus, both foreign investors and the Chinese government prefer the companies to achieve rapid growth through the use of more long-term debts. The binary variable of state control firm attribute has a significant positive association with the short-term debt ratio alone. However, evidence of declining use of long-term debt financing due to political connections, such as the issuance of equity, is not observed.

The Impact of Corporate Governance and Ownership Structure on The Level Of Corporate Social Responsibility Disclosure of Listed Manufacturing Companies on The Ho Chi Minh Stock Exchange – Vietnam

Purpose: The study has provided an overview of the theoretical foundation and empirical evidence on the impact of corporate governance on the level of corporate social responsibility (CSR) disclosure among listed manufacturing companies on the Ho Chi Minh Stock Exchange in 2021, utilizing secondary data from 118 manufacturing firms. Theoretical framework: In accordance with Agency Theory, the Separation of Ownership and Management, and the Stakeholder Theory, this study aims to investigate the influence of corporate governance characteristics on the extent of corporate social responsibility (CSR) disclosure in the manufacturing sector. Results and conclusion: The quantitative research model is constructed with five corporate governance factors and one control variable related to company characteristics, including the board size, the proportion of female members in the board, the proportion of independent board members, the foreign ownership ratio, the state ownership ratio, and the company size. The results from the Ordinary Least Squares (OLS) regression analysis indicate that the majority of the corporate governance variables are correlated with the level of CSR disclosure, except for the proportion of independent board members. Research implications: The study suggests managerial implications to help businesses recognize the importance of corporate governance in CSR disclosure, aiming to enhance reputation and attract investments. Originality/value: Additionally, the results also demonstrate that company-specific factors, such as company size and financial leverage, significantly impact the company's profitability.

Corporate name change: the effect of the firm’s shareholder distribution

ABSTRACT This study explores the effect of corporate ownership structure on firm performance resulting from a firm’s strategic decision of corporate name change. First, the study uses the separation of ownership and control to capture the corporate ownership structure using a new shareholder distribution metric. Second, the study empirically estimates the main and interaction effects of shareholder distribution on a firm’s performance resulting from its corporate name change using data from the Australian Securities Exchange from 2017 to 2022, during which 457 unique firms changed their corporate names. The study finds shareholding distribution has contrasting effects on firm performance due to the corporate name change. The positive impact of shareholder distribution on a firm’s abnormal returns is attenuated due to the corporate name change. Thus, while a manager-controlled firm, characterized by its larger shareholder distribution, reaps more benefits, such benefits are reduced when it makes strategic decisions, such as corporate name change. The study attributes such reduction in firm benefit to owner-manager conflict emanating from a firm’s dispersed corporate ownership structure.

Corporate ownership and insolvency law: An evidence from India

Reorganization or revival of the financially distressed corporate person is the prime objective of insolvency law. To rationalize the said objective, the insolvency law in India— Insolvency and Bankruptcy Code 2016 has adopted the manager-displacement model of the insolvency regime. It has become progressively evident from existing literature that the development of corporate governance mechanisms may have imperative implications on the aptness of a nation's legal system and its accomplishments. The existing evolutionary theory asserts that corporate bankruptcy and corporate governance structure complement each other. The historical account of corporate ownership structure in India represents a predominance of concentrated ownership patterns. Through the perspective of the existing evolutionary theory of corporate insolvency, the paper analyzes the corporate ownership structure and development of corporate insolvency law in India. The article also explores whether corporate ownership structure as a corporate governance mechanism can explain the progression of the insolvency regime in India. The findings of this paper would be of significance for jurisdictions that are considering reforms within their existing corporate insolvency law.

Compare the Beneficial Ownership Identification System from the Perspective of Anti-Money Laundering Between China and the UK

This study mainly focuses on the comparative study of the identification of beneficial owner system in anti-money laundering supervision of China and the UK. China scored poorly in The Financial Action Task Force's assessment of its anti-money laundering regime, which singled out major deficiencies in the system for identifying beneficial owners. Beneficial owner is an important concept in anti-money laundering regulation. The beneficial owner is, literally, the true beneficiary behind the company's various business practices. In today's very active economic activities, money laundering has always been the focus of law enforcement. At the same time, the complexity of corporate ownership structure and the diversity of money laundering forms have brought great obstacles to the supervision of money laundering. In such an environment, the identification and supervision of the actual beneficiaries behind the company can improve the efficiency of the supervision of money laundering. The UK received a high rating in The Financial Action Task Force's assessment and is considered to have set up an advanced anti-money laundering regulatory system internationally. Therefore, this study will find suggestions and directions for China's future institutional improvement by comparing the identification systems of beneficial owners in anti-money laundering supervision between China and the UK.

Do firms release boilerplate CSR reports to meet legitimacy requirements?

ABSTRACTBased on Chinese unique corporate ownership structure, we document that local government-owned firms are more inclined to disclose boilerplate CSR reports with little firm-specific information to circumvent substantive disclosure, although they do release CSR reports to convey that they are acting in the broader interests of society. Both economic and environmental pressures from the local government enhance firms’ adherence to boilerplate. Firms mandated to release CSR reports are more likely to follow boilerplate due to the ‘minimum-requirement’ orientation.

Determinants of Voluntary International Financial Reporting Standards Application: Review from Theory to Empirical Research

IFRS has become a global financial reporting standard, with many countries adopting it as their primary framework and others contemplating its adoption. Research on voluntary IFRS adoption sheds light on global convergence progress and its impact on accounting practices. This study aims to elucidate the factors influencing the voluntary adoption of IFRS by examining, analyzing, and synthesizing findings from empirical studies conducted worldwide. The research scrutinizes 185 relevant studies on the voluntary adoption of IFRS published before August 2023, employing a systematic literature review methodology. Our assessment reveals that, in prior research, the factors influencing the voluntary adoption of IFRS are categorized into seven main factors, including corporate operations, capital structure, ownership structure, internationalization, financial performance, corporate governance, and several other factors. These studies employ various methodologies, including data surveys and cross-sectional data, to estimate the relationships between these factors and the voluntary adoption of IFRS. In addition to providing an evaluation of the research in this field, this study can serve as a framework for future researchers to link and compare the results of different studies. We anticipate that this research will be beneficial for future scholars interested in the factors influencing the voluntary adoption of IFRS. Furthermore, the study proposes essential guidance for future research considerations.

Ownership structure and agency costs: evidence from the insurance industry in Jordan

PurposeThis study investigated the impact of corporate ownership structure on agency costs in the insurance industry.Design/methodology/approachThe study sample included 23 insurance companies listed on the Amman Stock Exchange (ASE) from 2010 to 2019. Panel regression was used to account for the firm- and time-specific unobservable variables and system-GMM estimation was used to address endogeneity concerns.FindingsThe results show that managerial ownership positively (negatively) affects selling, general and administrative (SG&A) expenses (assets turnover), implying that unmonitored managers engage in activities that serve their own interests rather than those of shareholders. The largest shareholder's ownership has no impact on agency costs, implying that the ownership of the largest shareholder is irrelevant. However, as the wedge between the percentage of capital owned by the largest shareholders and managers increases, SG&A expenses (efficiency ratio) decrease (increases), indicating that the existence of large non-management shareholders reduces agency costs. After accounting for the endogeneity problem, the impact of ownership structure on agency costs measured by asset turnover remains robust.Originality/valueTo the best of the authors' knowledge, this study is the first to provide unique evidence and useful insights into the determinants of agency costs from a frontier market in the Middle East and North Africa (MENA), with a focus on the insurance sector. Additionally, this study uses a new measure of separation between ownership and control by calculating the wedge between managers' and large shareholders' ownership.

The Dynamic Endogeneity Issue between Corporate Ownership Structure and Real-Based Earnings Manipulation in an Emerging Market: Advanced Dynamic Panel Model

This study aims to contribute to the existing literature by examining the relationship between corporate governance (CG) attributes and real-based earnings management (REM) in the context of an emerging market economy. The study employs a sample of 78 Egyptian Exchange (EGX)-listed companies covering the period from 2008 to 2017, yielding a total of 780 observations. To address dynamic endogeneity concerns between CG mechanisms and REM, the dynamic panel system-generalized method of moments (SGMM) estimator is used as the main analytical tool. The findings reveal that managerial and family ownership are negatively and significantly correlated with REM proxies, except for the ABCFO measure. By contrast, government and institutional ownership exhibit contrasting results, depending on the REM proxies used. The CG-EM relationship is influenced by several conflicting theoretical perspectives, including agency theory, institutional theory, stewardship theory, and resource dependence theory, resulting in inconsistent empirical findings. To the best of the authors’ knowledge, this study is the first to detect Real-earnings manipulation practices (REM) in the Egyptian context using six models to confirm the validity, reliability, and robustness of the findings. Additionally, the study employs an advanced statistical technique that considers endogeneity, heteroscedasticity, and simultaneity in the relationship between CG mechanisms and earnings quality. The results highlight the importance of considering the institutional and legal context of a country when analyzing the impact of corporate governance mechanisms on earnings quality, as the practice and implementation of governance mechanisms vary across countries.

Influence of Corporate Governance, Ownership Structure and Financial Architecture on the Strategic Effectiveness of the Company

Influence of Corporate Governance, Ownership Structure and Financial Architecture on the Strategic Effectiveness of the Company