Impact Of Ownership Concentration Research Articles

Ownership concentration and corporate performance on the Ghana stock exchange: a panel data analysis

Corporate governance is linked to corporate performance. The study examines the effect of ownership concentration on corporate performance on the Ghana Stock Exchange. Panel data covering a period from 2001 to 2006 for 28 firms were analyzed within the framework of both the fixed and random effects techniques. The results indicate that the effect of ownership concentration on corporate performance varies with the performance measurement variable. The results indicate a significant positive relationship between ownership concentration and return on assets and Tobin’s Q, whilst there is negative insignificant relationship with return on equity. We also document that insider system of corporate governance is practiced on the Ghana stock exchange as shareholding is highly concentrated in the hands of a few individuals or institutional investors. Other governance features such as board size, board composition and CEO duality are all essential in predicting corporate performance. The results of the study generally support existing literature on the impact of ownership concentration on corporate performance

Takeovers, corporate control, and return to target shareholders

In this paper, we investigated the impact of ownership concentration on the returns to target shareholders. In order to determine such impact, we have employed three models namely: the atomistic shareholder model; the large shareholder model; the single shareholder model. We found empirical evidence that the degree of ownership concentration in target firms has a significant negative effect on the returns to shareholders. These findings are consistent with the theoretical takeover models which support a negative relationship between bid premium and ownership concentration of target firms.

The impact of ownership concentration, and identity on company performance in the US and in Central and Eastern Europe

PurposeThe purpose of this paper is to assess the relationship between ownership structure and company performance of public companies. The central tenet of the analysis is that separation of ownership and control has an adverse effect on the value of the firm, as information asymmetry between owners and managers is exploited by management.Design/methodology/approachA cross sectional regression is conducted using data on 669 companies, which were members of the S&P 500, BUX (Hungary), WIG (Poland), SBI (Slovenia), PX (Czech) indexes in the third quarter of 2005. Owners with at least 5 percent share ownership are collected from Reuters and Business and Company Resource Center databases.FindingsResults for CEE companies are in line with that of Earle et al. and also support Zwiebel's “space creation” concept. The negative effect of multiple shareholdings is due to collective action problems instead of alternative explanations such as manager repression. Companies in the CEE region have rather concentrated ownership, which implies that at least there is one blockholder with dominant stake allowing him to influence corporate decision making. The contribution to management control of the next largest blockholder generates tension between the two causing costs that exceed the benefits of control. Interestingly, enough in case of institutional investors as largest blockholders the formerly positive effect on performance became negative. This is in contradiction with the popular literature that emphasizes the beneficent role of institutional investors. Results for the US firms also show that dominant blockholders “create their own space” in another word when the ownership stake of the largest blockholder exceeds 10 percent the contribution of smaller owners to the monitoring and control of management is negative. This implies that even though the dominant blockholder is much smaller in size relative to the one in the CEE sample its willingness to cooperate is low. On the other hand, when the largest blockholder is not dominant the coalition of blockholders is able to create value by efficient monitoring. Institutional investor as dominant blockholder further enhances the efficiency of control, while decreases it when coalition consists solely from institutional investors.Originality/valueThe definition of ownership concentration outlined by Zwiebel is applied. To assess the effect of coalition of blockholders on company performance the concept determined by Earle et al. is used. Their notion is extended by differentiating between blockholder identity and the homogeneity of blockholder coalition, in order to scrutinize the consequence of shareholder activism.

When Do Owners Make A Difference? A Comparison of Market-Centered versus Bank-Centered Governance

Our analysis examines whether concentrated ownership works differently in two distinct governance regimes: market-centered (US firms) and bank-centered (Japanese Keiretsu firms). We also investigate whether the impact of ownership concentration varies depending on economic conditions. We propose that the impact of concentrated ownership is not homogeneous over all ownership levels. We argue that as ownership stakes rise, owner monitoring can turn to owner entrenchment. The empirical methodology employed in this research allows us to detect such inflection points. Our results for the US sample of firms suggests that in weaker economic times, concentrated ownership produces greater entrenchment effects as opposed to monitoring effects, in general. However, among Keiretsu firms, we observed a marked orientation toward monitoring during periods of slower economic growth.

Total Board Compensation, Governance and Performance of Spanish Listed Companies

In this paper we present empirical evidence on the relationship between board remuneration of a sample of large Spanish companies and a set of explanatory variables such as performance and size of the company. The objective is to provide additional empirical evidence based on the agency theory for the Spanish institutional context, which differs from most ‘Anglo–Saxon’ model studies. We focus on the impact of a company's governance structure on the relationship between pay and performance. Specifically, we consider ownership concentration and firm leverage as key determinants of the board–shareholders relationship. Our results confirm the positive relationship between board remuneration and company performance, which is stronger for book values than for stock market measures. Industry performance also explains the remuneration and provides useful information for evaluating board behaviour. Company size is also related to board remuneration and affects the pay–performance relationship, although it is not relevant when we use an elasticity approach. Finally, the governance structure of companies is relevant when explaining the power of the compensation–performance relationship, and differences between the impact of ownership concentration and firm leverage on this relationship are found.

OWNERSHIP CONCENTRATION AND FIRM PERFORMANCE IN RUSSIA: THE CASE OF BLUE CHIPS OF THE STOCK MARKET

Based on panel data from 1995.1997, the paper focusses on the impact of ownership concentration on the performance of Russian non-financial privatised companies that constitute the group of .blue chips. of the country.s stock market. We consider three indicators of company performance . labour productivity, profitability, and Tobins.s q . and employ instrumental variables technique to correct regression results for endogeneity of ownership. We find that ownership concentration positively affects labour productivity, but has a negative impact on Tobins.s q. The relationship between ownership concentration and profitability follows a U-shaped pattern with the turning point at 56% concentration. These findings imply that ownership concentration results in higher technical efficiency of enterprises, but the benefits from productivity improvements do not accrue to all shareholders. This is consistent with the expropriation hypothesis that large owners use their power to extract private benefits of control.

The Value of Ownership

Journal of Political PhilosophyVolume 9, Issue 4 p. 404-434 The Value of Ownership† Meir Dan-Cohen, Meir Dan-Cohen Law, University of California, BerkeleySearch for more papers by this author Meir Dan-Cohen, Meir Dan-Cohen Law, University of California, BerkeleySearch for more papers by this author First published: 16 December 2002 https://doi.org/10.1111/1467-9760.00134Citations: 11Read the full textAboutRelatedInformationPDFPDF ToolsRequest permissionExport citationAdd to favoritesTrack citation ShareShare Give accessShare full text accessClose modalShare full-text accessPlease review our Terms and Conditions of Use and check box below to share full-text version of article.I have read and accept the Wiley Online Library Terms and Conditions of UseShareable LinkUse the link below to share a full-text version of this article with your friends and colleagues. Learn more.Copy URL Citing Literature Volume9, Issue4December 2001Pages 404-434 RelatedInformation RecommendedGovernance Mechanisms and Firm Value: The Impact of Ownership Concentration and DividendsLukas Y. Setia-Atmaja, Corporate Governance: An International ReviewCEO ownership and firm valueJohn M. Griffith, Managerial and Decision EconomicsMANAGERIAL OWNERSHIP CHANGE AND FIRM VALUE: EVIDENCE FROM DUAL‐CLASS RECAPITALIZATIONS AND INSIDER TRADINGRobert C. Hanson, Moon H. Song, Journal of Financial ResearchOutsider Board Activity, Ownership Structure and Firm Value: Evidence from KoreaByung-Seong Min, Peter Verhoeven, International Review of FinanceEquity Ownership and Firm Value: Evidence from Targeted Stock RepurchasesSaeyoung Chang, Michael Hertzel, Financial Review

Board Remuneration, Performance and Corporate Governance in Large Spanish Companies

In this paper we present empirical evidence on the relationship between board remuneration of a sample of large Spanish companies and a set of explanatory variables such as performance and size of the company. The objective is to contrast the existing evidence based on the agency theory in an institutional environment with differences from the reference literature. We focus on the impact of company's governance structure over the link between pay and performance. Specifically we consider the ownership concentration and the firm leverage as key elements of the board-shareholders relationship. The main results confirm a positive relationship between board remuneration and company performance, which is stronger for book values than for stock market measures. Industry performance also explains the remuneration and provides useful information to evaluate board behaviour. Company size is also related to board remuneration, and affects the pay-performance relationship, although is not relevant when we use an elasticity approach. Finally, the governance structure of companies is relevant when explaining the power of the compensation-performance relationship, and differences between the impact of ownership concentration and firm leverage on this relationship are found.