Foreign Ownership Research Articles

Ownership structure, adjustment speed toward target leverage and CEO power

PurposeThis study aims to investigate the impact of ownership structure on firm adjustment speed toward the target leverage.Design/methodology/approachThe study employs a partial adjustment model on a sample of 694 publicly listed firms from 2007 to 2021 in Vietnam.FindingsThe study finds that state and foreign ownerships inhibit the speed at which firms approach their optimal level of debt. Interestingly, this negative association is less pronounced in firms managed by powerful CEOs (duality CEOs; highly experienced CEOs; CEOs who they own or their families possess a large number of shares). Further, state and foreign ownership are found to be positively associated with firm performance. This beneficial impact weakens, however, when firms use more debts.Originality/valueThe outcome reveals that having a powerful CEO on board can help businesses in this emerging market counteract the detrimental effects that foreign and state ownership leave on the process of adjusting leverage.

The Effect of Ownership Structure on the Going Concern Companies Listed in the Iraqi Stock Exchange

The ability of the economic unit to continue is one of the basic assumptions for preparing financial statements. Therefore, users of these statements need to have a clear image of the unit’s performance and financial situation and to ensure that there is no indicator warning of financial distress. For example, there is a conflict of interest between the unit’s shareholders on the one hand and the management on the other hand. Therefore, this research seeks to study the effect of the difference in the nature of the ownership structure on the going concern of economic units. The research is based on the hypothesis that each type of ownership structure has a negative impact on the going concern unit. The research selected five economic units listed on the Iraqi Stock Exchange from the service sector as a sample for the research. Data is collected for the period extending from 2011-2021. The research used the survey method to measure the ownership structure and applied a Kida Model to measure going concern. The most significant results of the research are a negative effect of institutional ownership, concentrated ownership, and management ownership on the going concern of the unit, In contrast, the effect is positive for both government ownership and family ownership, and foreign ownership has no effect. Paper type: Research paper

The Effects of Governance-Related Regulatory Reform: Ownership Structure and Earnings Management in Vietnamese Listed Firms

The purpose of this study is to examine how the influence of the internal corporate governance mechanism, namely ownership structure, on firms’ earnings management (EM) practices and insider choices between accrual-based and real EM changed after regulatory reform in Vietnam. The author considers the role of three ownership types, managerial, state and foreign, and assess how the relation between ownership structure and EM was affected by the Code of Corporate Governance reform. The study relies on a comprehensive sample of 4,408 firm-year observations of 596 firms listed on either the HOSE or HNX between 2008 and 2016. The study finds a significant effect of the reform on the relation between ownership structure and EM. Thus, the reform mitigated agency problems of managers and foreign investors in Vietnamese listed firms. The study contributes to the literature as it provides a more complete picture of the effects of managerial, state and foreign ownership on EM where the protection of minority investors is generally weak and legal enforcement is low in a developing economy.

Understanding internationalization variance within a sport brand: case study of the Sparta Prague ice hockey and football clubs

This article examines the internationalization of HC Sparta Prague (ice hockey) and AC Sparta Prague (football) by focusing on management decision-making. Using interviews with key personnel, it explores the varying levels of internationalization in these clubs, emphasizing their reliance on foreign players, the utility of foreign ownership, fan responses to foreign coaching, and marketing efforts toward foreigners. Football, being more global, is subject to ‘Europeanization,’ whereas ice hockey, centered in North America, is influenced by ‘Americanization’ and ‘eventification.’ Despite significant fan overlap and efforts at eventification, neither team has had success attracting Prague’s tourists and neither currently views it as an important market, instead focusing on the domestic Czech market. Both clubs have undergone various phases of ownership, from foreign investors to a return to Czech owners, reflecting broader social and economic changes in the region following the fall of communism. The article further discusses the influence of historical and cultural contexts on the acceptance and resistance to globalization influences, emphasizing the importance of preserving national identity and selectively integrating global elements within the modernization of sports. The study proposes that, despite the Sparta brand identity being heavily influenced by internationalization, it remains largely a Czech brand, and cultural sporting identity currently plays a more crucial role in resisting globalization than sport brand identity in Eastern Europe.

Corporate tax avoidance and narrative disclosure tone: a developing country perspective

Purpose This study aims to examine the link between tax avoidance, corporate governance and narrative disclosure tone using a sample of public companies in Pakistan. Design/methodology/approach Data for 125 companies listed on the Pakistan Stock Exchange (PSX) are collected over 10 years from 2011 to 2020. Sentiment analysis is conducted to determine the disclosure tone, and regression analysis is used to test the association between the variables. Findings This paper finds that firms that engage in tax avoidance tend to use a more positive disclosure tone and are more likely to engage in impression management. Moreover, promoting sound governance through board independence and gender diversity is associated with a less positive disclosure tone. However, firms with more family board members and higher foreign ownership are more likely to use a more positive disclosure tone. Practical implications Regulators can use this information to develop better guidelines to protect investors and ensure faithful disclosures to address both positive and negative news. Originality/value The study contributes to the literature by examining corporate tax avoidance as a determinant of narrative disclosure tone, a relationship that has not been widely explored. Moreover, as most disclosure tone research has been conducted in developed countries, this paper provides valuable evidence from a developing country.

The Effect of Ownership Structure on the Going Concern Companies Listed in the Iraqi Stock Exchange

The ability of the economic unit to continue is one of the basic assumptions for preparing financial statements. Therefore, users of these statements need to have a clear image of the unit’s performance and financial situation and to ensure that there is no indicator warning of financial distress. For example, there is a conflict of interest between the unit’s shareholders on the one hand and the management on the other hand. Therefore, this research seeks to study the effect of the difference in the nature of the ownership structure on the going concern of economic units. The research is based on the hypothesis that each type of ownership structure has a negative impact on the going concern unit. The research selected five economic units listed on the Iraqi Stock Exchange from the service sector as a sample for the research. Data is collected for the period extending from 2011-2021. The research used the survey method to measure the ownership structure and applied a Kida Model to measure going concern. The most significant results of the research are a negative effect of institutional ownership, concentrated ownership, and management ownership on the going concern of the unit, In contrast, the effect is positive for both government ownership and family ownership, and foreign ownership has no effect. Paper type: Research paper

Do gender diversity and foreign investor affect sustainability disclosure

AbstractWe examine the effect of female board members and foreign institutional investors on corporate social responsibility (sustainability) disclosure in Indonesian listed firms from 2015 to 2017. Our final sample comprised 1192 firm‐year observations. We apply ordinary least squares pool regression to estimate the associations and address the endogeneity problem using the two‐stage least squares model, generalized method of moments, and lagged variables. While previous studies have focused on the impact of female board members and foreign institutional investors on financial outcomes, we extend the literature by investigating the association between both female board members and foreign investors and sustainable disclosure in Indonesia, where the participation of women is nominal, especially at the top management level, and the level of foreign ownership is high. Our findings propose a proportion of women as board members for listed firms and promote attractive policies to increase the number of foreign investors investing in Indonesia. It also contributes to conflicting results regarding the relationship between corporate governance and corporate social responsibility (CSR) commitment. Our results were robust after testing for endogeneity and adding more control variables. Overall, the findings have practical implications for policymakers and investors regarding corporate disclosure and governance in Indonesia.

R&D investments, ownership and local firm growth

Abstract How do research and development (R&D) investments stimulate the local economy? Our paper complements and extends the voluminous literature on the externalities of R&D investments by looking at internal firm growth across regions and the “spillovers” from R&D workers on other workers within the same firm. More specifically, we examine how R&D investments affect the change in employment and productivity in the same firm over time. We also investigate the differences that come with domestic or foreign ownership. Combining data from the Swedish biennial survey series on R&D with firm and establishment registers, we find that R&D-stimulated growth is a localized phenomenon: firms tend to grow in the same regions where they invest in R&D activities. This link is particularly strong for employment effects. While we find that the positive association between R&D and labor productivity holds for all firms, growth effects on local employment are limited to domestically owned firms, especially in manufacturing. The results strengthen our understanding of the correlation between R&D and firm growth on a local level, and contribute to both the academic and policy debate on the effects of globalization on local economic growth.

Effect of Ownership Structure on Performance of Quoted Financial Firms in Nigeria

This study investigates the relationship between ownership structure and firm performance of quoted Nigerian financial firms in Nigeria. This study employs an Ex post facto research design, utilizing data extracted from annual reports of the financial firms listed on the Nigerian Exchange Group (NGX) between the years 2014 to 2023. The population of interest consists of 48 listed financial firms. Secondary data from the firms' annual reports were collected and analyzed using fixed effect panel regression analysis as specified by Hausman test. The findings reveal significant positive effects of managerial ownership, institutional ownership, and ownership concentration on firm performance. These results align with established theories such as agency theory and stewardship theory, as well as previous empirical studies in the field of corporate governance and ownership structure. The study concludes that increasing managerial ownership can align the interests of managers with shareholders, leading to improved firm performance. Attracting institutional investors who bring expertise, monitoring capabilities, and long-term investment perspectives can also contribute to enhanced firm performance. Furthermore, careful management of ownership concentration can enhance monitoring and decision-making efficiency, align shareholder interests, and reduce agency costs. However, the study finds no significant impact of foreign ownership on firm performance in the Nigerian context. This suggests the need for further research to better understand the specific dynamics and potential implications of foreign ownership in the Nigerian financial industry, considering factors such as regulatory restrictions, cultural differences, and information asymmetry.

PENGARUH PAJAK, KEPEMILIKAN ASING, DAN TUNNELING INCENTIVE TERHADAP KEPUTUSAN TRANSFER PRICING

This study aims to determine Tax, foreign ownership, and tunneling incentives on transfer pricing. The population in this study are consumer non-cyclical companies listed on the Indonesia Stock Exchange (IDX). The research method used in this study is a quantitative method with secondary data and sample selection in this study using the purposive sampling method. The total number of samples in this study is 7 consumer non-cyclical companies as research samples. The analysis method used in this study using panel data regression analysis with the help of the e-views software program version 12. The results of the study indicate that together or simultaneously stating Tax, foreign ownership and tunneling incentives have an influence on companies to carry out transfer pricing, partially tax does not have a significant influence in influencing transfer pricing decisions. In terms of foreign ownership does not affect transfer pricing decisions. Partially tunneling incentives affect transfer pricing

Determinants of the Developed Country Index and Indonesian Macroeconomic on the IDX Growth 30 and IDX Value 30

This study analyzes the determinants of the Developed Country Index (Hang Seng Index, Dow Jones Index) and Indonesian macroeconomic variables (10-Year Government Bond Yield, Foreign Ownership in Government Bonds, and the BI-7 Day Reverse Repo Rate, BI7DRR) on the movement of the IDX Growth 30 Index (IDXG30) and IDX Value 30 Index (IDXV30) from 2018–2022. Monthly time series data is used with a saturated sampling technique, processed via Eviews 12 using VECM analysis. The study conducts Stationarity, Optimal Lag, VAR Stability, and Cointegration Tests, along with Impulse Response Function (IRF) and Forecast Error Variance Decomposition (FEVD) analyses Results show that the Hang Seng Index and Foreign Ownership in Government Bonds negatively affect IDXG30 and IDXV30, while BI7DRR positively influences both. The Dow Jones Index positively affects IDXG30 but negatively impacts IDXV30. Meanwhile, the 10-Year Government Bond Yield negatively affects IDXG30 and positively influences IDXV30. Additionally, the performance of IDXG30 and IDXV30 themselves and BI7DRR significantly contribute to both indices' movements.

Social media as an amplifier of insider trading profits

Our study investigates the relationship between stock forum posts and insider trading profitability. Using regression analysis, we find a positive relationship between the number of posts on a firm’s stock forum and insider trading profitability, particularly for sales transactions. A difference-in-differences analysis based on the launch of the mobile app for stock forums further confirms these results. This profit-amplifying effect of stock forum posts is likely due to the pervasive noise on social media, as it weakens following the introduction of regulations aimed at cleaning up the internet’s information environment. Additionally, we observe distinctions in post tone around insider trades, with the profit-amplifying effect more pronounced in firms with high information asymmetry, substantial retail holdings, and less foreign ownership. Overall, our study highlights a potential dark side of social media in amplifying insider trading profits, emphasizing the need for regulatory measures.

Measuring the Potential Involvement of Conventional Commercial Banks with Foreign Ownership in Increasing the Capital Capacity of MSMEs

Measuring the Potential Involvement of Conventional Commercial Banks with Foreign Ownership in Increasing the Capital Capacity of MSMEs

Tác động của quản trị công ty và thu nhập phi tín dụng đến hiệu quả tài chính của các ngân hàng thương mại Việt Nam

The roles of non-interest income and corporate governance on bank operations in the literature have not been a cooperative explanation. Therefore, the paper determines corporate governance and non interest income on the Vietnamese banks' financial performance from 2011 to 2021. SYS-GMM demonstrates that non-interest income, fees, and other income enriches Vietnamese commercial bank’s financial performance. Regarding bank corporate governance, the board size, CEO ownership, state ownership, and foreign ownership negatively impact ROA and ROE. Conversely, the number of female boards, board ownership, and board compositions enhances the banks' financial performance. The interesting judgment is the corporate governance factors will lessen the intensity of the effect of noninterest income and its components on the banks’ financial performance. The paper proposed some implications for optimizing corporate governance (board characteristics and ownership structure) and increasing non-interest income to improve Vietnamese commercial banks’ financial performance.

기업의 부가가치정보와 ESG평가정보가 외국인지분율에 미치는 영향

Foreign investors are expected to assume that companies with high value-added information and ESG evaluation information are sound companies and to invest their funds. Therefore, we would like to verify this. The purpose of this study is: 1) Companies with high added value information will have a high foreign ownership ratio. 2) Companies with high ESG evaluation information will have a higher foreign ownership ratio. And 3) we conducted an empirical analysis predicting that value-added information would have a higher positive influence and information power on the foreign ownership ratio than ESG rating information. The research method is based on the company's added value information and foreign ownership ratio data from 2016 to 2020 provided by Fn-guide and ESG evaluation information published by the Korea ESG Research Institute, which is a statistical processing method such as basic statistical analysis, correlation analysis, Regression analysis was performed. To summarize the research results, the correlation analysis results show the dependent variable foreign ownership ratio and variables of interest: 1) added value information and 2) ESG evaluation information (rating (R), environment (E), society (S), and governance (G) sectors) The results showed that there was a significant positive (+) correlation. And the regression analysis results show that both value-added information and ESG evaluation information (rating (R), environment (E), society (S), and governance (G) sectors) have a significant positive (+) effect on the foreign ownership ratio. appear. In addition, ESG rating information was found to have greater influence and information power on the foreign ownership ratio than value-added information. The implications of these research results suggest that foreign investors are interested in and tend to invest funds in companies with high added value information and ESG evaluation information. Therefore, it is expected that added value information and ESG evaluation information serve as useful accounting information for foreign investors in the capital market.

Executive compensation and worker wages during the global trade collapse: Evidence from Japanese firms

Widening income inequality is a serious social concern in many countries. We examine the causal effect of a negative demand shock on executive compensation and worker wages using a quasi-natural experiment, considering Japanese firms that experienced a sudden and substantial export decline following the global financial crisis in the late 2000s. Worker wages tended to decline significantly more relative to executive compensation after the crisis in firms depending more on exports, causing a wider pay differential. We establish the robustness of our difference-in-difference results by considering selection into exporters, excluding sporadic exporters, and controlling for foreign ownership or liquidity.

The influence of local institutional dynamics on foreign ownership in international joint ventures: Speed, irregularity and synchronization

This research focuses on how three dynamics of institutions--speed, irregularity and synchronization of pro-market reforms −-lead to adjustment of ownership structures in established international joint ventures (IJVs). Based on empirical research on the ownership adjustments by IJVs in 30 provinces in China, I find that MNEs tend to take higher ownership in IJVs in regions with more rapid and synchronized reforms, while they are less likely to increase ownership share in provinces with highly irregular reforms. Moreover, rapid reforms are more likely to stimulate foreign ownership in regions with initially poor institutions, while regular and synchronized reforms help to increase foreign ownership when the institutional development is relatively mature. The findings suggest that managers in multinational enterprises pay more attention to the dynamics of institutions in host markets, and host governments carry out pro-market reforms more rapidly and steadily to attract foreign investments.

Capital Inflow and Technical Efficiency: A Comparative Analysis Between India and China

This article empirically investigates the impact of foreign direct investment (FDI) on the technical efficiency of manufacturing firms in India and China. We apply the first-stage, stochastic frontier analysis (SFA), to the translog production frontier. The first-stage method estimates simultaneously consider exogenous technical efficiency determinants and translog production function factors. We take foreign ownership and foreign inputs as exogenous determinants of technical efficiency with control variables and foreign technology input in the production frontier. Empirical results find that foreign technology shifts the production frontier by enhancing productivity for Chinese firms, not for Indian firms. Furthermore, domestic firms which use foreign inputs and foreign firms are more efficient. JEL Classification: F14, O31, O32

The Effect of Transfer Pricing, Foreign Ownership on Tax Avoidance with Corporate Social Responsibility (CSR) as a Moderating Variable

This study analyzes how Transfer Pricing and Foreign Ownership affect tax avoidance, and how Corporate Social Responsibility (CSR) can moderate the relationship. This research falls into the quantitative category because it uses hypothesis testing methods to measure the effects between variables. The research sample consists of 30 manufacturing companies listed on the Indonesia Stock Exchange (IDX) during the 2020-2021 period. Data were collected through the IDX website (www.idx.co.id) and analyzed using multiple linear regression. The results showed that tax avoidance is significantly affected by transfer pricing and foreign ownership. In addition, CSR is proven to moderate the effect of transfer pricing and foreign ownership on tax avoidance significantly.

The Role Of Foreign Ownership: The Influence Of Accounting Conservatism And Corporate Social Responsibility Disclosure

The Role Of Foreign Ownership: The Influence Of Accounting Conservatism And Corporate Social Responsibility Disclosure