Corporate Ownership Structure Research Articles

Management language experience, cultural integration and the performance of mergers and acquisitions

ABSTRACTInstitutional economists believe that language, as an important informal institution, has a significant impact on economic activities. However, the study of language on corporate behavior is still relatively insufficient. Our paper examines the influence of linguistic distance between the acquirer and the target firm on M&A performance in China, from 2000 to 2012. The results indicate that the linguistic distance between the acquirer and the target firm significantly reduces the performance of M&As. Furthermore, we suggest that the influence of language differences on the performance of M&As is mainly driven by the cultural effect rather than the communication effect. In addition, we find that the relationship between language differences and M&A performance is affected not only by manager characteristics, types of mergers and corporate ownership structures, but also by regional development. This paper provides a new way to examine management’s participation in M&A activities from the perspective of language.

Corporate Ownership Structure and Cost of Raising Capital for Seasoned Equity Offerings

Corporate Ownership Structure and Cost of Raising Capital for Seasoned Equity Offerings Jang-Shee Barry Lin, Bingsheng Yi, Chia-Wei Chen, Yi Ming Zheng Abstract This paper examines the differences in announcement effects among Combined, Primary, and Secondary SEOs. Earlier studies suggest that primary SEOs might signal stock over-pricing, while secondary SEOs might increase misalignment of interests between insiders and shareholders. Theoretically, combined SEO might experience the negative incentive effects from both the primary and secondary SEOs. However, the empirical result is curious. We find that Primary SEO suffers the most negative 3-day cumulative abnormal returns (CAR) upon announcement, followed by Combined SEOs, while Secondary SEOs experience the smallest, but statistically significant negative 3-day CAR. To seek some explanation for this curious empirical result, we investigate the patterns of ownership among the three types of SEOs. Insider ownership is highest for combined SEO, while institutional ownership is highest for the secondary issues, with block ownership also highest for the combined SEOs. We argue that such differences in ownership structure at least provide some explanation to the reason why combined SEOs are not perceived to exhibit the negative incentive effects associated with both primary and secondary SEOs. Full Text: PDF DOI: 10.15640/jfbm.v7n1a1

Ownership structure as a measure of corporate performance

Economic transition is not a one-dimensional process but implies ownership, structural and managementtransformation. We can call the current circumstances of the economy of the Republic of Serbia posttransitional, for which the ownership transformation is largely due. The aforementioned process is the basis forthe formation of a corporate sector in which all the most important determinants of professional managementare expressed, since the capital market represents the greatest distance between ownership andmanagement. The structure of corporate ownership determines the nature of the relationship betweenmanagers and shareholders, which in the final instance manifests in the form of principal - principal orprincipal - agent of the situation.The paper will analyse the nature of the ownership structure of corporations, according to one of the usualthree dimensions (concentration of ownership), in relation to the corporate performance. The corporateperformance will be expressed using the Tobin's Q indicators. The structure of ownership of the corporationwill be presented using two sets of indicators. The first group consists of indicators of percentage participationof a number of major shareholders in the form of Top_1, Top_2, Top_3 and Top_5. Another approach toproperty ownership analysis includes G1 (widely held) indicators that represent dispersed -ownedcorporations, G2 corporations with large shareholders, and G3 (ultimate owner) majority-owned corporations.In the random sample will be selected corporations that have a listing on the Belgrade Stock Exchange, whileat the level of parametric statistical procedures, methods will be used for analysingthe correlation between thelisted variables and identifying the differences between the groups formed on the basis of the abovementioned criterion.The main objective of the paper is to define the ownership structure of a corporation that has directimplications for the management and performance of corporations. Corporate performance expressed throughmarket capitalization determines the future of operations through the scope of future investments.

Corporate Ownership Structure and Firm Risk: Empirical Evidence from Listed Companies in Sri Lanka

Corporate Ownership Structure and Firm Risk: Empirical Evidence from Listed Companies in Sri Lanka

The Effects of Ownership Structure, Sub-Optimal Cash Holdings and Investment Inefficiency on Dividend Policy: Evidence From Indonesia

We investigate how a firm’s decision to hold excessive cash or to over-invest could influence its dividend payout policy in Indonesia. Additionally, we examine the association between corporate ownership structure and cash dividends. Using a data set of Indonesian listed firms for the period from 1995 to 2014, we find that excessive cash holding (over-investment) positively (negatively) affects a firm’s likelihood of paying dividends. Also, we find that family, foreign, state and institutional ownership have significantly negative links with dividends, which suggests the signals of expropriation of firms’ wealth by major shareholders. These findings strongly support the expropriation hypothesis that commonly applies to firms with higher level of concentration or to firms in a weak legal environment by which the rights of minority interests are put at risk by large shareholders.

Corporate governance in the European context

The purpose of corporate governance is to ensure that the owners of companies are protected against value-decreasing activities by corporate insiders. The way this protection is pursued, however, varies among countries and legal systems. While most research so far has focused on Anglo-Saxon countries, little is known about the specific differences and drivers of corporate governance structures in countries belonging to the Civil Law legal system. We examine the differences in corporate governance of blue-chip companies in Austria, France, Germany, Italy, and Switzerland, and analyze the influence of the institutional framework and the operating environment on corporate ownership and board structures. Despite convergence trends and the fact that all included countries apply the Civil Law legal system, we find that corporate governance structures differ in many aspects and depend both on the institutional framework and the operating environment. The institutional framework is important to explain the distribution of ownership and the independence of the board of directors, while the operating environment explains the size of the board and differences in ownership between the financial services industry and the consumer goods industry.

Influence of Corporate Control and Ownership Structure on the Value of Firms Listed at the Nairobi Securities Exchange

This study aimed at establishing the influence of corporate control and ownership structure on corporate values of companies listed at the Nairobi Securities Exchange. The paper tested the hypothesis that there is no significant moderating impact of ownership structure on the relationship between corporate control and corporate value growth based on Tobin Q and ROA measurements. The theory applied were agency theory, stewardship theory and stakeholder theory with the main anchoring theory being the agency theory. The study applied census survey for sixty four firms listed at the NSE. The time frame of analysis is five years between 2013 and 2017. Out of the 64 listed companies targeted, 58 were analyzed forming 90% of the population. The study applied census survey given that the population of the listed companies at the NSE were not many. Out of the 64 listed companies targeted, 59 were analyzed forming 92% of the population. Corporate control index was developed as a proxy for corporate control and ownership structure index was developed as a proxy for ownership structure. While ROA and Tobin Q were used to measure corporate value. The hypotheses were tested using both correlation and regression analysis. The key study variables of the listed companies were subjected to descriptive statistics and the results revealed a significant positive relationship between the variables. The study findings revealed significant moderating effect on the relationship between the value of the firm and its ownership structure.

The effect of corporate social responsibility and ownership structure on firm value in food and beverage companies in south east Asia

This study aims to analyze the influence of corporate social responsibility (CSR) and ownership structure towardfirm value. The independent variable thatused in this study are corporate social responsibility (CSR), institutional ownership, managerial ownership and foreign ownership. The dependent variable that used in this study is firm value which measured by Price to Book Value (PBV) ratio. The sample of this study were taken from several food and beverages companies in Shoutheast Asia that registered in www.orbis.bvdinfo.com which published annual report and annual stock data in 2014-2016.A multiple regression analysis with SPSS 22.0 For Windows was used as the technique data analysis. The result of this study explain that corporate social responsibility (CSR), institutional ownership and managerial ownership have influence to firm value, while foreign ownership does not have influence to firm value.

Proliferation of corporate governance codes in the backdrop of divergent ownership structures

In the backdrop of the convergence–divergence debate, the goal of this article is to examine the proliferation of corporate governance codes in the light of a single factor, namely varying corporate ownership structures across countries. While such codes emanated and became popular in the United Kingdom where companies largely display dispersed shareholding, the concept has been disseminated to countries that carry considerably different ownership structures, i.e. mainly concentrated shareholding. This is bound to give rise to incongruities in the implementation of these codes. In order to enunciate the claim made above, the article will consider two aspects that convergence advocates have focused on, namely (i) shareholder empowerment and (ii) self-regulation. For example, corporate governance codes place considerable emphasis on the structure and independence of the boards of directors of companies as a means to ensure shareholder protection. While this approach is meant to produce results in companies with dispersed shareholding, the same cannot be said of companies with concentrated shareholding where the empowerment of shareholders through director independence or other means would only embolden the already dominant controlling shareholders. Moving to self-regulation, a voluntary code operating on a ‘comply-or-explain’ basis can ensure sufficient adherence only if certain factors are present in the jurisdiction where it is applied. Relying upon available empirical evidence, this article finds that use of self-regulation in voluntary codes of corporate governance may generate different results depending upon the ownership structures of companies, thereby exhibiting signs of divergence on this count.

A semiparametric type II Tobit model for time-to-event data with application to a merger and acquisition study

ABSTRACTMerger and acquisition is an important corporate strategy. We collect recent merger and acquisition data for companies on the China A-share stock market to explore the relationship between corporate ownership structure and speed of merger success. When studying merger success, selection bias occurs if only completed mergers are analyzed. There is also a censoring problem when duration time is used to measure the speed. In this article, for time-to-event outcomes, we propose a semiparametric version of the type II Tobit model that can simultaneously handle selection bias and right censoring. The proposed model can also easily incorporate time-dependent covariates. A nonparametric maximum likelihood estimator is proposed. The resulting estimators are shown to be consistent, asymptotically normal, and semiparametrically efficient. Some Monte Carlo studies are carried out to assess the finite-sample performance of the proposed approach. Using the proposed model, we find that higher power balance of a company is associated with faster merger success.

Regional green development level and its spatial relationship under the constraints of haze in China

This paper includes the new constraints of haze in the environmental efficiency research framework, and the SBM-Undesirable and Malmquist exponential models are used to measure and analyse the evolution characteristics and regional differences of regional green environmental efficiency of China. And applied China's regional panel data and a spatial Dubin model to deeply explore the impact of environmental regulation, openness, urbanisation, industrial structure, and technological innovation on regional green environmental efficiency. The result show that, under the constraints of smog, the regional green environment efficiency of China is different with each area and shows strong spatial dependence and spatial differentiation. The overall spatial distribution of the ‘east–middle–northeast–west’ gradient is decreasing. Environmental regulation had a major impact on the green environment efficiency of the region and demonstrated an ‘inverted N-type’ relationship. The degree of openness, urbanisation, industrial structure, and technological innovation play an active role in promoting regional green sustainable development. Economic growth, corporate ownership structure, fiscal policy, and foreign investment dependence have hindered the progress of regional green sustainable development to a certain extent.

Digital Banking, Corporate Governance, Ownership Structure, and Intellectual Capital Performance: Evidence from Indonesia

The base of the company’s growth has changed, from tangible assets to intangible assets. Many companies recognize the importance of IC as performance drivers. This research aimed to examine the effect of the implementation of digital banking, corporate governance, family ownership, foreign ownership, and government ownership on Intellectual Capital (IC) performance; and examined the effect of interactions between corporate governance and ownership structure on IC performance in banking companies listed on the Indonesia Stock Exchange (IDX) during 2012-2016. This research used a regression method with panel data. The total observations were 130 cases. In this research, IC performance used Value Added Intellectual Coefficient (VAIC). We proved that the implementation of digital banking did no significant implications for IC performance in the same year because it was still in the process of developing. Family ownership, foreign ownership, government ownership, and the interaction between corporate governance and ownership structure did not affect IC performance. On the contrary, this research proved that corporate governance had significant implications for improving IC performance. JEL Classification : G31, G32, G34 DOI : https://doi.org/10.26905/jkdp.v22i4.2481

A behavioral perspective on corporate dividend policy: evidence from France

PurposeThis paper empirically examines the catering theory of Baker and Wurgler (2004) in the particular context of France. Considering the characteristics of French market – known for its high concentration of capital – it attempts to highlight the role family control plays in the managerial tendencies to satisfy non-informative dividend demands.Design/methodology/approachThe paper focuses on a large data set of French firms included in the SBF-250 index over a period of 1992-2010. It uses a variety of dividend policy measures, including dividend premium, percentage of dividend-paying firms and probability of paying dividends. It adopts appropriate empirical specifications (time-series and probit models) to substantiate the research hypotheses.FindingsThe empirical findings show that the percentage of payers rises with the dividend premium, and that the dividend premium and the confidence index of French households are negatively correlated. This reflects the sensitivity of dividend demand to investor sentiment. Moreover, results of multivariate panel regression show a positive and statistically significant effect of the dividend premium on the firm’s tendency to pay, after controlling for firm characteristics. Finally, it finds that the dividend premium effect disappears in the case of family-controlled firms. This result is in line with the long-term orientation of family firms.Research limitations/implicationsThe study focuses on the dividend payment behavior of French firms. Although dividends are deeply engrained in France, authors believe that it will be interesting to look at the whole payout policy and particularly the role played by share repurchases.Practical implicationsAddressing short-term catering and managerial opportunism, the results of this study may be of interest for shareholders, potential investors and regulators.Originality/valueTo the best of the authors’ knowledge, this is the first study that provides empirical evidence on Baker and Wurgler (2004) catering theory by considering the particularity of French market where, unlike the US, percentage of dividend-paying firms is high and the corporate ownership structures are different.

Mixed ownership in the face of technological change:Response to digitization in telecommunications

This study examines how the ownership structure of corporations shapes their response to technological change. In our empirical analysis, we focus on how European telecommunications operators responded to digitization. We predict that mixed ownership, a situation in which, following privatization, the shares of a company are partly privately held and partly held by the government, is associated with lower responsiveness to digitization. We theorize that CEOs and top management of corporations with mixed ownership are exposed to conflicting views on how companies should address the challenges posed by technological change, thereby making them more likely to maintain the status quo. Our data on European telecommunications operators that had to adapt to the advent of internet-based communication services provide support for our conjectures. In addition, the analysis shows that mixed ownership is particularly problematic when firms are led by an internal CEO and when they integrate extramural digital technology, which lends further support to the proposed theoretical mechanism.

Corporate ownership structure, market anomalies and asset pricing

Identifying and assessing risks remain a challenging issue for academics and professionals. In this study, we investigate whether a link can be made between market anomalies and corporate ownership structure. Actually, the French market is seen as an ‘insider system’ with high concentrated ownership structures that encourage long-term relationships between the companies and investors. Besides, in France, Government ownership is common. Adding to these local characteristics the legal context, distortions in returns can be observed on stock market. Through a large sample comprising 1163 firms over more than a quarter century (from January 1990 to June 2016), this study brings deep insights about asset pricing models in the French stock market. Unlike US firms, we document a positive relation between French companies with high asset growth rates and stock return. We propose an alternative five-factor model with orthogonal size, value, reversed investment and quality designed for the French market. Our model is more suitable than ‘standard’ asset pricing models to estimate the cost of capital, evaluate abnormal returns and optimize portfolio allocation strategies.

Corporate Social Responsibility, Ownership Structure, and Firm Value: Evidence from Korea

This study examines the relationship between corporate social responsibility (CSR) and firm value in the context of ownership structure. Specifically, our study explores whether large shareholder and foreign shareholder ownership play an important role in the CSR–firm value relationship. Using a sample of 48 firms listed on the Korea Stock Exchange (KSE) between 2010 and 2014, we find that CSR is positively associated with firm value. We further find that the relationship between CSR and firm value is weaker in firms with high large shareholder ownership than in firms with low large shareholder ownership. However, we find no evidence of the effect of foreign ownership on the relationship between CSR and firm value. This study sheds light on the importance of ownership structure in the relationship between CSR and firm value, suggesting significant implications for academics, practitioners, and policymakers. We contribute to the existing literature by providing empirical evidence on the effect of ownership structure on the CSR–firm value relationship. Policymakers may consider these results in implementing their policies that can enhance CSR activities.

Corporate Ownership, Internet Penetration and Internet Financial Reporting: Evidence from the Gulf Cooperation Council Countries

Manuscript type: Research paper. Research aims: This study aims to examine how the individual effect of company-level ownership structure and the joint-effect of company-level ownership structure with country-level Internet penetration, can impact on Internet Financial Reporting (IFR). Design/ Methodology/ Approach: An index consisting of 35 IFR items was used to collect information from 152 listed financial com- panies from the Gulf Cooperation Council (GCC) countries. These companies were from Bahrain, Oman, Qatar, Saudi Arabia and the United Arab Emirates. Data were analysed using regression analysis. Research findings: The findings imply that companies with high government and family ownerships have lower extent of IFR. High quality IFR is evident in companies located in countries with a strong Internet penetration. However, the association between corporate ownership structure and IFR is not influenced by the country’s Internet penetration. Theoretical contributions/ Originality: Our study is the first cross- country comparative analysis that utilises data from the GCC coun- tries to explore the determinants of the IFR. This study incorporates company-level governance and country-level institutional factors which are relevant and unique in the context of the GCC to add to the existing evidence that had mainly concentrated on a single-country setting or the developed market. Practitioner/ Policy implications: The findings of this study, which are related to the negative impact of government and family ownership on IFR can be attributed to the regulators in the GCC countries. It is recommended that the GCC improve its enforcement of legal protection for shareholders so as to protect the minority shareholders’ interests. Research limitation: Future cross-country analysis on IFR can focus on other emerging markets that differ from the GCC. In addition, these studies can consider other relevant company-level governance aspects such as managerial ownership and country-level institutional factors such as cyber security risks as variables. Keywords: Ownership, Internet Penetration, Gulf Cooperation Council. JEL Classification: G11, G02, C91

소유구조와 R&D 지출 간의 상호작용이 기업 수익성에 미치는 영향

소유구조와 R&D 지출 간의 상호작용이 기업 수익성에 미치는 영향

Corporate Governance and Ownership Structure

The highly concentrated ownership in the Bosnia and Herzegovina market provides a rich environment to explore corporate governance practices. The paper will assess effects that ownership structure of companies has on the level of implementation of corporate governance in companies listed on the Official market of the Banja Luka Stock Exchange. Results of implementation of the corporate governance in companies will be presented using Scorecard analysis for evaluation of the implementation of practices and principles of corporate governance for companies which are listed on the Official market of the Banja Luka Stock Exchange. Ownership structure will be presented in three groups of owners determined by controlling owner: government, domestic and foreign owners. Paper will show correlation and effect which different owners of companies have on the level of implementation of corporate governance in these companies.

Executive’s compensation, good corporate governance, ownership structure, and firm performance: a study of listed banks in Indonesia

Executive’s compensation, good corporate governance, ownership structure, and firm performance: a study of listed banks in Indonesia