Effects Of Large Shareholders Research Articles

أثر تعدد ملكية كبار المساهمين على الأداء المالي: دراسة على الشركات المدرجة في سوق الأسهم السعودية

This study aims to investigate the impact of large shareholders' ownership on the financial performance of listed companies in the Saudi market. The study was conducted on a sample of 158 listed companies over the period 2016-2022, using the panel data method. While the study documents that there is a significant positive relationship between the size of large shareholders’ ownership and firm’s financial performance, this relationship turns to be negative if the large shareholders own large stakes in more than one firms in the market. Further investigation reveals that the negative relation between a firm’s financial performance and the ownership of large shareholders is attributed to those shareholders who own a large stake in the same industry of the focal firm but not those who have large stakes in other firms in different industry. The findings of the study provide practical implications for policy makers. Firms; board, and investors in the financial markets. Additionally, this study contributes to the existing literature by showing there is heterogeneity in the effect of large shareholders’ ownership on firms’ policies.

Does corporate ownership matter for innovation?

Corporate governance theories suggest that concentrated ownership can be a mechanism for addressing the agency problem in a firm, and large shareholders matter for managerial decisions. Theoretically, the effect of large shareholders on innovation proxied by R&D is not determined yet, since their risk averseness and long-term time horizon affect R&D investment in opposite direction. It is quite unclear which effect is dominant. Thus, this issue should be explored by empirical evidence. The effect of ownership concentration on R&D investment is empirically examined by using firm-level panel data of Korea between 1980 and 2018. The empirical findings are: i) the effect of ownership on R&D is negative; ii) a bell-shaped relationship between ownership and R&D is observed; iii) the negative effect of ownership on R&D is found in old firms only; iv) the effect of ownership on R&D is positive for large firms and negative for small firms; and v) the effect of ownership on R&D is positive before the financial crisis.

The Effect of Large Shareholders' Ratio on Profitability

The Effect of Large Shareholders' Ratio on Profitability

Non-Dividend Payout Behavior of Companies: Research on the Effect of Large Shareholders’ “Voting with Their Feet”

ABSTRACT This study explores the effectiveness of large shareholders’ “voting with their feet,” in motivating a listed company to alter its non-dividend payout behavior. We show that the split-share structure reform, which changed the company’s shares held by controlling shareholders and other large shareholders from nontradable shares to tradable shares, gave large shareholders the ability to exit and therefore could inhibit this behavior. Furthermore, when a company has a higher ownership concentration of controlling shareholders and a lower quality of external auditing, the inhibitory effect is more significant. This paper considers China representative of emerging markets and suggests another way to manage the non-dividend payout behavior of listed companies in emerging markets.

Large shareholders’ shareholding and earnings’ longitudinal persistence

ABSTRACTThis paper is the first to adopt longitudinal data analysis methods, such as the Kaplan-Meier survival analysis model, hierarchical linear model and Cox proportional hazards regression model, to investigate the relationship between large shareholders’ shareholding and earnings persistence. We find that large shareholders’ shareholding has a negative effect on corporate longitudinal persistence. The large shareholders’ shareholding will increase the risk of earnings decline and strengthen the declining trend of earnings. The effects of large shareholders’ shareholding on earnings’ longitudinal persistence for SOEs are different from those for non-SOEs, the effects in the pre-crisis period are also different from those in the post-crisis period. These findings contribute to the literature by adopting longitudinal data analysis methods and present new empirical evidence on the economic consequences of large shareholders’ shareholding.

Short Selling, Insider Trading and Large Controlling Shareholders

Using a dataset of insider trading and short selling from the Hong Kong Stock Exchange, we investigate the impact of large controlling shareholders on short sellers’ ability to predict insider trading. We document a significant increment in short selling volume before the information of insider sales is released to the public. Compared to widely held companies, insider trading in firms with large controlling owners triggers stronger short sales. Further, the abnormal short sales are more concentrated in family-controlled firms rather than state-controlled firms. The evidence of a concave relationship between the intensity of short selling and controlling power in family firms contributes to the ongoing debate on whether and when the entrenchment effect of large shareholders dominates the alignment effect. Within family-controlled firms, trading by non-family owners attracts more attention of short sellers. Overall, our analysis provides new evidence about the information interaction between short sellers and insiders and also the effect of the presence of large controlling shareholders on the information flows from insiders to outsiders.

Company Performance in Nigerian Listed Companies: Do Large Shareholders Expropriate Minority Shareholders?

It is argued that large shareholders have enormous influence over their companies as their ability to monitor the executives can mitigate the agency problems. This paper examines how large shareholders are related to company performance after distinguishing domestic large shareholders from the foreign large shareholders. Using a panel of 58 companies listed on the Nigerian Stock Exchange with 222 company-year observations from 2009 to 2012, firm-level fixed effects regression was used for analysis. We find evidence that domestic large shareholders are associated with better company performance while foreign large shareholders show a concave relationship with company performance with inflection point at 31.88%. The empirical result also shows that the joint presence of the both domestic large shareholders and foreign large shareholders in companies seems to make them pursue overall wealth maximization objective of the company. The result is consistent with the contention that concentrated ownership remains an effective corporate governance mechanism in an environment with weak investor protection rights. The study contributes to the corporate governance literature of the substitution effect of large shareholders for effective corporate governance practice. DOI: 10.5901/mjss.2015.v6n6p236

The Effect of Large Shareholders and Loan Risk on the Productivity Change of Savings Banks

The Effect of Large Shareholders and Loan Risk on the Productivity Change of Savings Banks

Motivations and potential monitoring effects of large shareholders

PurposeThe purpose of the paper is to synthesize and evaluate the stream of research that links large shareholders to the production of shared corporate benefits.Design/methodology/approachThe methodology is to review the literature with an emphasis on the development of findings.FindingsThe presence of large shareholders is positive only if their incentives are aligned with other owners and they have the power to exert influence. The presence of large shareholders, even those whose interests are aligned with owners, does not always result in stronger governance structures.Research limitations/implicationsThe research is limited by the existing stream of literature and the completeness of our search process.Practical implicationsA synthesis and evaluative summary of the research is presented that may be used by researchers, executives, and board members.Originality/valueFrom a research viewpoint, effective research designs should incorporate both incentive and power when assessing the monitoring role of large shareholders to aid in the validity and comparability of research results. From a practice viewpoint, managers and board members may use our summary figure to evaluate power relationships and likely reactions to strategic and tactical decisions in their firm's governance structure.

Large Shareholders, Diversification and Performance: Evidence of Rent Seeking from Malaysia's Manufacturing Firms

The study addresses the argument of agency theory and transaction cost economics in one framework. It examines the interaction effects of large shareholders and diversification contingent on rent seeking environments such as intangible assets and industrial competition on firms' value. Based on an unbalance sample of 256 manufacturing firms from 1996 to 2000, the findings suggest that diversification is able to increase debt capability and enhance firms' value in this economy. However, irrespective of large shareholders' controlling interest, they applied diversification strategy to expropriate shareholders' value in both rent-seeking environments. The benefits of diversification are overwhelmed by the issue of agency problems caused by large shareholders in this economy