Corporate Ownership Structure Research Articles

Impact of Corporate Ownership Structure on Agency Costs: Evidence from Sri Lankan Listed Firms

<p class="Default">Over the last decade, the corporate ownership structure and agency cost has been an important topic and discussion among research and business community. However, to what extent the ownership structures matter for mitigating agency costs still needs to be resolved. This study empirically investigates the role of different ownership structures in dealing with agency issues for Sri Lankan non-financial firms from 2015 to 2019. The panel data method was used to examine the impact of agency cost on ownership structure. The authors found a consistent view of the relationship between agency cost and ownership structure. Accordingly, the results explained that managerial ownership facilitates mitigating agency issues. The authors also noticed that larger firms could reduce agency costs by having sizable institutional or concentrated ownership. While in the case of small firms, foreign ownership alleviates agency costs. The study would help firms' stakeholders, particularly managers, owners and investors, make the right investment decisions.

The Effect of Corporate Governance Disclosures, Accounting Conservatism and Ownership Structure on Firm Value (Study in Industrial Sub-Sector of Indonesian Stock Exchange on 2018-2020)

The EffectThis research was conducted to analyze, observe and test the effect of corporate governance disclosure, accounting conservatism, ownership structure on firm value. The object of this research is the industrial sub-sector companies listed on the IDX during the 2018-2020 period. The sample selection used the purposive sampling method with a total of 96 samples that met the criteria. The analytical method used multiple linear regression analysis with help of the SPSS statistical program. The results show that (1) The corporate governance disclosure has a positive effect on firm value., (2) accounting conservatism has a positive effect on firm value, (3) managerial ownership has no effect on firm value, (4) institutional ownership has no effect on firm value.

Government subsidies of new energy vehicle industry and enterprise innovation: Moderating role of chief executive officers' technical background

AbstractThe development of new energy vehicles has become an important means by which China can continue to grow as a major automobile manufacturing powerhouse while joining the worldwide effort to tackle climate change. This paper uses Chinese‐listed new energy vehicle companies during 2015–2019 as the research sample and examines the impact of government subsidies on enterprise innovation, with the technical background of CEOs as an important moderating factor. We also analyze the extent of this moderating role within different institutional environments and corporate ownership structures. The results show that government subsidies can encourage new energy vehicle enterprises to increase innovation investment, and CEOs' technical backgrounds can strengthen this relationship. Compared with regions with better institutional environments, the moderating effect of CEOs' technical backgrounds is more obvious in regions with poor institutional environments, and when compared with state‐owned enterprises, the effect is more obvious in the private sector. We propose a list of government and internal enterprise policies that would make use of the insights gained from our research results.

Capital Structure and Firm Profitability in Developing Countries

This research intended to investigate the influence of capital structure on private hospitals’ performance using a sample of 162 patients. The researchers used a quantitative approach to evaluate the impact of capital structure (Corporate governance, Ownership structure, and Constructive thought patterns) to measure the influence on sustained competitive advantage in private hospitals in North America. The research sample was chosen using a random sampling method and carried out in various locations in North America. A total of 175 questionnaires were issued, but only 162 participants completed them correctly. The results showed that the most effective relationship was between corporate governance as element of capital structure with firm performance, on the other hand the less effective relationship was between ownership as element of capital structure with firm performance. In addition, our results also suggest that the finance managers should use debts as last alternative in their capital structure. To the end, our study can be extended by incorporating more controlled variables, larger sample and longer period data in the regression models to get better results. Other measures and methodology can also be employed. &#x0D;

Corporate Law and Political Economy in a Kleptocracy

Abstract Described by the U.S. Attorney General as “kleptocracy at its worst,” 1MDB, a Malaysian state-owned company, was a vehicle for theft of billions by the former prime minister for nine years. Malaysian corporate law is largely aligned with international standards, raising questions as to why it failed to effectively safeguard against the expropriation of corporate property. The Article investigates empirical evidence of the strength and implementation of Malaysian corporate law that ostensibly protects shareholders from expropriation. It examines the translation of global norms into local practice and highlights the contextual influences that have impeded effective enforcement. The analysis draws on broader theoretical approaches to illuminate the evolution of Malaysian shareholder protection and explain the gap between law in the books and law in practice. While Malaysian corporate law has been modeled on benchmarks of international standards, its corporate ownership structures, political economy, and form of political governance have developed in a distinctly different manner from institutions in Western developed countries. This research explores the limitations of prescribing formal law based on global standards, highlighting the need to consider the implications of political economy. Broader implications for the discourse on legal transplants and global norms for corporate law are considered, along with potential reforms.

THE EFFECT OF CORPORATE SOCIAL RESPONSIBILITY AND OWNERSHIP STRUCTURE ON PROFITABILITY

The purpose of this study is to determine the effect of Corporate Social Responsibility (CSR) and Ownership Structure proxied by Institutional Ownership on the profitability (ROA) of banks listed on the Indonesia StockExchange (IDX) for the period 2018-2020. The data used in this study are secondary data which is the annual reports of banks and obtained from the bank's official website and Indonesia Stock Exchange (IDX). The form of data used in this study is panel data, a combination of time-series and crosssectional data which is then processed using E-views 9 with multiple regression methods. The population is all banks listed on the Indonesia Stock Exchange (IDX) from the 2018-2020 periode, totaling 47 banks. This research used purpossive sampling with 39 banks as finale sample. The results of the study conclude that the Corporate Social Responsibility (CSR) as variable X1 has no effect on ROA and Institutional Ownership has a significantly negative effect on ROA and through the F test conducted, the two variables X (CSR and Institutional Ownership) are stated simultaneously affect ROA with a coefficient level determination of 59.87%.

Does Ownership Structure Affect Environmental, Social and Governance Activity? Evidence from the Banking System of an Emerging Economy

In recent years, there is an increasing interest in the literature in investigating whether and how corporate ownership structure may influence corporate social responsibility (CSR), but despite some attempts, this relationship still lacks in-depth empirical exploration. Building on extant insights, we analyze the relationship between environmental, social and governance (ESG) activity and the ownership structure of the Indian banking system. Our sample includes 37 publicly traded Indian banks observed over the period 2015–2020. Through random effect regression models accounting for the existence of selection bias, we find that the banks’ decision to engage in ESG activities is associated with the investors’ geographical region of origin rather than the types of investors. Our study brings knowledge to the extant literature, shedding light on the role of the ownership structure in driving ESG oriented decisions and actions.

How Do Various Forms of Ownership Impact Firm Performance?

Corporate governance and ownership structures are key factors affecting companies' management, operations and innovation. This study aims to provide a better understanding of the interaction between ownership forms and firm performance by addressing the key research question: How do various types of ownership forms impact on governance efficiency and firm value? We propose to address this issue by taking the mandatorily reported shareholders' ownership characteristic to determine each ownership form and to empirically test the governance role and the impact of ownership form on firms' value. The results show that there is a high concentra-tion of state ownership among the listed companies. In terms of market performance, it is shown that companies directly controlled by the state ownership generally perform worse than companies controlled by other ownership forms, namely legal person shares, state-owned legal persons shares, and tradable shares. Based on separate forms of ownerships, our investigation has found a significant negative relationship between ownership concentration and firm valuation.

Kualitas Audit, Good Corporate Governance, Struktur Kepemilikan, Leverage, dan Manajemen Laba Riil BUMN Indonesia

This research is aim to understanding about influence audit quality, good corporate governance, ownership structure and leverage towards real earnings management. Real earnings management in this research be measured with abnormal cash flow, abnormal discresionary expenses and abnormal production cost, and be examined with regretion multivariate model. This research in taking sample is using purposive sampling model with a final sample amount of 140 sample during 2015-2020 period. The result of hypothesis test is only two hypothesis are supported, that is the independent audit committee and foreign instance ownership significantly negative effect towards riil earnings management through reduce discreationary cost. While audit quality variable, independent board of commissioners, government ownership, domestic instance ownership, private ownership and leverage can’t be proven to affect riil earnings management.

A Systematic Literature Review: Determinants of Sustainability Reporting in Developing Countries

This study aimed to find out how the development of sustainability reporting is seen from the theoretical and practical perspectives and how the solutions are solved. This study used a systematic literature review approach. Using the PRISMA (Preferred Reporting Items for Systematic Reviews and Meta-Analyses) method, 24 selected articles were obtained that matched the criteria. The results show that research related to sustainability reporting currently focuses on nine aspects (variables): firm size, profitability, financial leverage, corporate governance structure, ownership structure, firm age, industrial sector, corporate posture, and board qualification and experience. However, from these studies, it was found that there were inconsistencies in the results. Some results showed that a determinant is significant in influencing the company’s sustainability, whereas other studies indicated that the relationship between the two variables was not significant. Research related to sustainability reporting has been carried out jointly in developed and developing countries. However, research focusing on sustainability reporting in developing countries has not been widely carried out; therefore, this study is expected to be a reference for further research on this topic, especially in the decision-making process related to setting priorities in SDG planning and funding allocation. This study focused on companies in developing countries.

A Progressive Turn on Corporate Ownership in the Second Republic of Korea

This study traces the evolution of corporate governance and state regulation in the context of Korean chaebols during and after the state led industrialisation of the 1960s. A description of changes in corporate ownership and control structures in response to progressive measures towards corruption and wealth concentration by the state reveals the establishment of new corporate and political networks which facilitated the persistence and growth of surviving chaebols. This study also illustrates the trajectory of family control of chaebols consequent to strong inheritance regulation and financial liberalization.

Moderating role of corporate governance and ownership structure on the relationship of corporate sustainability performance and dividend policy

ABSTRACT The aim of this study is to investigate the influence of corporate governance and ownership structure on the relationship of corporate sustainability performance and dividend policy by using a panel dataset of 79 non-financial companies listed on Borsa Istanbul 100 Index for the years 2014–2020. We employed the panel logit, probit and tobit regression models for the analysis. The results indicate that corporate governance and family ownership significantly and positively moderate the relationship between corporate sustainability performance and dividend policy, while concentrated ownership and institutional ownership do not play a significant moderating role on this relationship. The findings also show that firm-level corporate governance is associated with high dividend payments, suggesting that this institutional mechanism helps reduce agency problems and lead companies to allocate capital more efficiently. The findings provide valuable insights for companies in structuring sustainability activities and shaping dividend policies with regard to ownership structure. It also offers policy prescriptions in emerging markets in the area of corporate financing policies.

Corporate Ownership Structure and Cash Holdings in the Vietnamese Market

This study examines the relationship between corporate ownership structures and cash holdings in Vietnam using panel regression. We use a sample of 646 non-financial firms listed on the Ho Chi Minh City Stock Exchange from 2010 to 2018. Our main analysis employs firms’ state and foreign ownership status as the explanatory variables and firms’ cash holdings as the response variable. Both state ownership and foreign ownership exert a statistically significant positive influence on the investee firms’ internal cash reserves. Our baseline result implies that both state and foreign investors are likely to demand high cash ratio based on precautionary motives. To address endogeneity issues, we also include a firm’s cash policy in the past three years in the analysis. Both types of ownership and cash holdings are significantly positively related, hinting that our results are robust to autocorrelation. This positive link reveals that firms are likely to accumulate large cash savings in a weak business environment characterized by poor investor protection and high levels of political uncertainty and information asymmetry. These results indicate a possibility that different management preferences of domestic and foreign shareholders may be overridden by an adverse business environment. One important policy implication is that regulatory agencies should adopt a uniform accounting standard for financial reports, preferably under the international financial reporting standards (IFRS), to improve the information transfer between outside investors and shareholders. This will enhance minor shareholders’ rights and values and induce more effective monitoring mechanisms to enter the market, thereby creating a healthier business environment.

How Does Ownership Structure Affect Business Performance?-A Study based on 2021 Fortune 500 Retail Industry Enterprise

This paper mainly analyzes the impact of ownership concentration on corporate financial performance from the perspective of ownership structure and company financial performance. The equity concentration is mainly demonstrated from the proportion of the largest shareholder’s shareholding, and the financial performance is mainly demonstrated from three aspects: solvency, operating ability, and profitability. It is to study whether the ownership structure is related to the financial performance of the retail industry and how to pass change corporate ownership structure to improve corporate financial performance. Based on the analysis of the ownership structure and financial performance data of 14 retail companies in the “2021 Fortune 500”, EViews 10 software was used to process the data. Results of the study demonstrate that when the state-owned holding factor is included, the shareholding ratio of the largest shareholder has a significant negative correlation with company performance. This also means that, for enterprises in the retail industry, the higher the degree of equity concentration of the enterprise, the less conducive to the growth of the financial performance of the enterprise.

Do Internal Corporate Governance Code, Capital Structure, and Ownership Structure Matter in Explaining the Performance of Nigerian Financial Institutions

The rise in financial scandals and corporate failures prompted a greater spotlight on CG, particularly as it pertains to financial institutions (FI). This research looks at how the corporate governance code, CS, and ownership structure affect financial institution performance in Nigeria. The data for the study was obtained from the annual financial reports of 37 financial service institutions as the sample between 2010 and 2019. Internal corporate governance code proxy by board size, board independence, board remuneration and audit committee size, capital structure proxy by long-term debt and equity and short-term debt and equity ratio, ownership structure proxy by board ownership, ownership concentration, and foreign ownership concentration are the independent variables used in this study. The dependent variable is performance proxy by earnings per share and Tobin's Q. The study used a dynamic panel GMM estimator to deal with the panel data models. The results show that the EPS of FI in Nigeria is positive and significantly influenced by board size and short-term debt to equity ratio. Board remuneration and the long-term debt to equity/assets ratio, on the other hand, have a negative and considerable effect on FI earnings per share. Similarly, for Tobin Q, Bindp and Bremu, except board size, negatively impacted FP of the Nigerian financial service industry. Capital structure proxies by long-term debt and equity and short-term debt and equity ratio exerted a considerable impact on Tobin's Q. Equally, the ownership structure has a considerable impact on Tobin's Q. As a result, we recommend that financial institutions in Nigeria prefer equity financing over long-term debt when funding capital projects. On the other hand, short-term debt obligations should be used to fund short-term initiatives to keep the firm's performance growing. The research is necessary to ensure that debt and equity ratios are used appropriately in financial sector funding firms to maximise return on capital.

Impact of Managerial Ownership on Corporate Social Responsibility in Korea

A firm’s corporate social responsibility (CSR) record improves its image and that of its managers. This ultimately can positively affect enterprise value. However, CSR investments do not necessarily lead to better firm performance, as long-term costs are incurred. Therefore, managers often make CSR investment choices based on personal incentives. This study analyzed the relationship between managerial ownership and CSR activities in Korean public companies based on different managerial CSR incentives and ownership levels. Using the Korean Economic Justice Institute’s CSR index, the results show that firms with higher managerial ownership had excellent CSR records. Higher managerial ownership led to alignment between managers and shareholders, with managers making CSR investments to enhance long-term enterprise value. However, in firms with lower accounting transparency, managers reduced CSR investments. Managers did not value their CSR reputations in firms with poor financial reporting quality and serious information asymmetry. Instead, they diverted CSR resources to other projects to meet their interests. As Korean firms increase their investment in CSR, CSR disclosure responsibility is strengthened. Our study results provide significant implications to academics, practitioners, investors, and other stakeholders, suggesting the importance of corporate ownership structure on investment in CSR.

Corporate Governance and Ownership Structure on Illegal Insider Trading Activities in Malaysian Public Listed Companies

Corporate Governance and Ownership Structure on Illegal Insider Trading Activities in Malaysian Public Listed Companies

Determinants of corporate governance disclosure: evidence from an emerging market

PurposeThis study aims to examine the influence of corporate governance (CG) mechanisms and ownership structures on corporate governance disclosure (CGD) in listed Mauritian companies.Design/methodology/approachMultivariate regression techniques, both static and dynamic panel data models, were employed to analyse the effect of the determinants on the CGD level of 42 Mauritian listed companies (38 non-financial and four financial firms) from 2009 to 2019.FindingsIn the static model comprising 42 firms, CG attributes such as board size, board meeting frequency, CG committee meeting frequency and audit committee meeting frequency are major determinants of CGD, whereas ownership structure variables such as managerial ownership and institutional ownership do not influence CGD. In the dynamic model, only the CG meeting frequency is a major determinant. The determinants of CGD vary between non-financial and financial firms.Research limitations/implicationsThis study is limited to CGD in listed firms, excluding mandatory disclosures and unlisted firms. Future research can use qualitative approaches to better understand CGD behaviour with an extension to mandatory disclosures and non-listed firms.Practical implicationsPolicymakers can rely on determinants to draw policy measures to raise CG standards further. Domestic and foreign investors may also depend on the determinants of their expectations of CGD while making investment and credit decisions.Originality/valueThis study contributes to the extant literature by examining a new determinant of CGD: CG committee meeting frequency. It also investigates any differences in the determinants between financial and non-financial firms with different listing status.

The Limits of Financial Globalization

Although barriers to international investment have fallen sharply over the last 60 years, the positive impact of financial globalization has proved far more limited than expected. Predictions by economists (including the author) that cross‐country differences in investment and financing would narrow or even disappear have largely failed to materialize. Investors everywhere continue to hold disproportionate amounts of domestic securities in their portfolios; levels of national investment continue to be tied (and largely limited) to local savings and income; and corporate ownership structures remain more concentrated, and capital structures more highly leveraged, in countries perceived to offer less protection to outside investors.The main explanation for the persistence of these cross‐country differences in investment and financing centers on the importance of two “agency problems”:First, in companies with controlling shareholders (which tend to be the rule in developing economies), those shareholders can use their power to transfer value from minority shareholders. Second, those who control the state can use their power to expropriate wealth from both controlling and minority shareholders. In countries with limited protection for minority shareholders, where these “twin agency problems” are most pronounced, corporate insiders tend to “co‐invest” more with outside investors, and ownership is thus more concentrated.But however necessary it may be to attract outside capital, such co‐investment also works to limit the benefit of financial globalization, making it less likely that risks will be shared internationally and capital invested where it is most productive. The author closes with the prediction that, as countries and their companies find more effective ways to manage these twin problems, developing and developed nations alike will benefit from increasingly global financial markets.

The Effect of Ownership Structure on Tax Aggressiveness in Manufacturing Companies in Indonesia

This study aims to determine the effect of corporate ownership structure consisting of concentrated ownership, government ownership, institutional ownership, and foreign ownership on tax aggressiveness. The total sample used in this study is 200 taken from manufacturing companies listed on the Indonesia Stock Exchange from 2018 to 2019. The results found that concentrated and foreign ownership had a negative effect on tax aggressiveness, while institutional ownership had a positive effect on tax aggressiveness. Meanwhile, government ownership has no significant effect on tax aggressiveness.