Impact Of Ownership Structure Research Articles

The Moderating Effect of Ownership Structure on the Relationship between Related Party Transactions and Earnings Quality: Evidence from Saudi Arabia

This paper seeks to investigate how earnings quality is affected by related party transactions (RPTs). The research also examines the impact of ownership structure as a moderating variable on this relationship. Panel data with the firm fixed effects model are utilized in the paper. A sample of 91 non-financial companies listed on the Saudi Stock Exchange between 2018 and 2022 were included, resulting in 429 observations of company performance over that time period. This paper finds that there is a negative association between RPTs and earnings quality. Furthermore, the study found that the adverse effect of RPTs on earnings quality is intensified when there is managerial ownership and institutional ownership as moderating variables. The study’s conclusions are robust and reliable, as the sensitivity analysis results reinforce those of the basic analysis. To the authors’ knowledge, there is relatively little available evidence on the connection between RPTs and their correlation with earnings quality, particularly in the context of ownership structure acting as a moderating variable. Moreover, the study’s findings hold important implications for enhancing earnings quality in developing economies. To the authors’ knowledge, no studies have been conducted in Saudi Arabia thus far to investigate the impact of ownership concentration, institutional ownership, managerial ownership, foreign ownership, and state ownership on the association between RPTs and earnings quality. Therefore, this paper expands the literature by modeling how the interaction between ownership structure and related party transactions may influence earnings quality. In this way, the authors contribute to the body of knowledge by unveiling a more robust control mechanism, particularly in developing economies with ineffective markets for corporate control.

Impact of ownership structure and cross‐listing on the role of female audit committee financial experts in mitigating earnings management

Impact of ownership structure and cross‐listing on the role of female audit committee financial experts in mitigating earnings management

Sink or swim in the R&D pool: the relationship between peer density and streamlining

Our study explores the strategic reduction of firms' R&D investment, focusing on ‘peer R&D density’ as a main factor. This concept reflects the level of R&D engagement among competing firms. Based on organisational ecology theory, we find a U‐shaped relationship between peer R&D density and R&D streamlining, driven by legitimacy and competition resulting from high peer density. Furthermore, we examine how state ownership moderates this relationship. Using data from Chinese listed firms between 2006 and 2018, our analysis sheds light on the drivers R&D reduction and the impact of ownership structures on these dynamics. Our findings enhance the understanding of corporate survival and adaptation in research‐intensive industries, highlighting the interplay between state and market logics.

CSR and ownership structure: Moderating role of board characteristics in an emerging country context

AbstractThe existing literature on the impact of ownership structure on corporate social responsibility (CSR) showed inconsistent results and disregarded the possibility of non‐linear patterns in the relationship. The present study examines the non‐linear relationship between ownership structure (family, foreign, institutional, and government) and CSR expenditure of listed non‐financial service sector firms in India. Further, the moderating effect of board variables, including board size, board independence, multiple directorships and gender diversity, is explored in the ownership structure‐CSR nexus. Based on a balanced panel dataset of 243 non‐financial service sector companies listed in India, the study observed an inverse U‐relationship between institutional ownership and CSR. The study also found that family, foreign, and government ownership positively influence the firm's social engagement. However, the study could find partial support for the moderating role of the four board characteristics; board size, board independence, multiple directorships and gender diversity in ownership‐CSR association. The study contributes to existing CSR and corporate governance literature by exploring one of the major factors (ownership structure) impacting CSR and the role of board variables in the association.

The Influence of Ownership Structure, Board Composition and Financing Decisions on the Performance of Manufacturing Companies in the Consumer Goods Sector

This research aims to investigate the impact of ownership structure, board size, proportion of independent directors, funding decisions, company size, and dividend policy on the performance of consumer goods manufacturing companies. Purposive sampling was employed for data collection. Results indicate that ownership structure and board size positively and significantly influence company performance, as measured by Tobin's Q and ROA. However, the proportion of independent directors, funding decisions, company size, and dividend policy do not exhibit significant effects. Consequently, effective management of ownership structure and board size is crucial for enhancing company performance in the consumer goods manufacturing sector. These findings provide valuable insights for companies to improve their performance and corporate governance practices, fostering stability and sustainability in alignment with economic trends.

Ownership Structure and Financial Sustainability of Saudi Listed Firms

This research assesses the impact of ownership structure on financial sustainability. Panel data from 102 Saudi non-financial listed firms covering 2013 to 2022 were analysed using OLS and fixed effects methods. Further, the GMM was employed to check for robustness. The research outcomes reveal the strong and positive effects of institutional ownership and family shareholding on financial sustainability. This positive impact implies that robust and stringent monitoring of family shareholding and institutional investors may neutralise managerial entrenchment, reduce agency costs and pave the way for financial sustainability. However, government ownership appears insignificant, while managerial ownership exerts a strong negative influence on financial sustainability. The negative effect suggests that managerial shareholding may be counterproductive to organisational efficiency. Importantly, the outcomes look consistent using several econometric models. Therefore, the research findings may further shape policymakers’ understanding of how the diverse monitoring strategies of ownership structure influence financial sustainability. Also, the results may serve as an incentive for managers and standard setters to support firms in embracing institutional and family shareholding. The presence of these shareholders may minimise agency conflicts and maximise firm value for sustainable profitability.

Beyond the bottom line: exploring the role of governance mechanisms in promoting corporate tax responsibility

Purpose Because of growing corporate tax scandals, there is an enhanced focus on corporate taxation by governments, institutions and the general public. Transparency in tax matters has been identified as critical for effectively managing and promoting socially responsible tax behaviour. This study aims to explore the impact of ownership structure, board and audit committee characteristics on corporate tax responsibility (CTR) disclosure. Design/methodology/approach This research collected data from the annual reports of Pakistani-listed firms over 12 years, from 2009 to 2020. Consequently, the data set encompasses a total of 1,800 firm-year observations. This study uses regression analysis to test the relationship between corporate governance and CTR disclosure. Findings The results show that board gender diversity, managerial ownership and audit committee independence promote tax responsibility disclosure. In contrast, family board membership, CEO duality, foreign ownership and family ownership negatively impact tax responsibility disclosure. Additional analyses reveal the specific information categories that produce the overall effects on tax responsibility disclosure and assess the moderating impact of family firms on the governance and CTR disclosure nexus. Practical implications Corporations can use the results to encourage practices that enhance transparency and improve the quality of disclosures. Regulatory authorities can use the findings to stipulate better protocols. Doing so will be vital for developing countries such as Pakistan to improve tax revenue and cultivate economic growth. Originality/value While this research represents, to the best of the authors’ knowledge, one of the first empirical investigations of the association between corporate governance and CTR, the results contribute to the corporate governance literature and offer fresh insights into CTR, an emerging dimension of corporate social responsibility.

Corporate Governance and Ownership Structure Effect on Corporate Social Performance: Evidence from Non-Financial Industries of Pakistan

This paper will examine the diversified associations between corporate governance and ownership structure impact on corporate social performance in dissimilar industries across Pakistan non-financial. The OLS models regression are estimation to using data from 2011 to 2020, that the non-financial industries of Pakistan. Corporate governance including board independence (BINDP), board size (BSIZE), and audit size and committee (A&COM), and structure ownership including, ownership managerial (MOWN), ownership family (FOWN), and ownership concentration (COWN), inspires of organizations corporate social performance with environmental and social risk market capitalization. Generally, the outcomes significant of ownership structure and corporate governance is recognized in industries of non-financial different at a joint level while examines the organizations with a risk whole risk market capitalization disclosure. That suggest to identifying the ownership structure and corporate governance can risk mitigate the market capitalization disclosure non-financial industries in term of correlation the corporate social performance improving and the developed the benefits with the calculation of identical female director in women on board and family ownership organizations (independent or executive) to the panel. This study also demand consideration to the corporate governance and improve structure ownership to enhance the corporate social responsibility in industries non-financial with market risk capitalization analysis, whereas risk control performance of industries analysis after complement by critical mass and independent directors properties.

The Impact of Ownership Structure on Corporate Financial Strategy CASE STUDY ON KUWAIT ENERGY EGYPT

The Impact of Ownership Structure on Corporate Financial Strategy CASE STUDY ON KUWAIT ENERGY EGYPT

Impact of Ownership Structure and Corporate Governance on Earning Management

Purpose- This study investigates the interplay among Ownership Structure, Corporate Governance, and Earnings Management by employing ordinary least square (OLS) regression. To find the relationship among the three constructs based on data sourced from listed companies on the Pakistan Stock Exchange spanning 2016-2021 were used, excluding the financial industry due to its unique reporting system.Design/Methodology- The sample comprises 111 firms chosen based on data availability. To measure earnings management, the researchers used a modified version of John's model (1995) to estimate discretionary accruals. Findings- The study's key findings include the significant role of institutional investors in reducing earnings management. The number of board directors and ownership concentration were observed to impact discretionary accruals. Control variables indicated that more profitable, growing, and highly leveraged firms tend to engage in earnings management, which decreases with the firm's age. The study revealed a diverse relationship between ownership structure, corporate governance codes, and earnings management. Notably, significant institutional investment reduces ownership concentration, leading to decreased earnings management. Moreover, the results show a positive and significant correlation between firm size and Return on Assets (ROA). Practical Implications- Board independence was found to have a positive impact on earnings management, suggesting that boards serve a more complex role than mere monitoring to mitigate accounting manipulation.

The Impact of Ownership Structure and Board Characteristics on Earnings Quality: Evidence from Saudi Arabia

The Impact of Ownership Structure and Board Characteristics on Earnings Quality: Evidence from Saudi Arabia

Pengaruh Struktur Kepemilikan dan Ukuran Perusahaan terhadap Nilai Perusahaan

For investors, company value is very significant cause it shows the value of investment in the business. For investors, enterprise value identifies the potential for profit and adequate returns on their investment. In this investigation, we'll find out the simultaneous also partial impact of ownership structure also company size on firm value. The survei population also sample consisted of energy sector businesses that were written on the IDX among 2018-2021. A sample of 44 was collected for this research using purposive sampling, it served to gather data on 11 organizations over a 4 year observation period. The E-Views 12 programme is used in this study's quantitative research approach to conduct simultaneous and partial testing on descriptive analysis and panel data regression. Ownership structure and business size are examples of independent factors that have an influence on firm value which are the dependent variables. The survei results show that managerial, institutional ownership also company size simultaneously effect the company value of energy companies written on the IDX in 2018-2021. In energy businesses written on the IDX among 2018–2021, management ownership has a somewhat favourable impact on company valuation, whilst institutional ownership and company size have no bearing. The Adjusted R-Square score of 49.31% demonstrates the limits of this study. The suggestion for companies is to continue to increase company value by displaying the size of share ownership which can influence company value, especially institutional ownership and company size.

Does Ownership Structure and Financial Health Affect Firm’s Earnings Quality? Evidence from Emerging Economy

Earnings quality is a demanding attribute of firm and is valued by investors in resource allocation decisions. High earnings quality firms create value for stakeholders and poor earnings quality causes value deterioration. This study takes into account earnings quality attributes of Pakistani corporate sector and investigates impact of ownership structure and financial health on firms’ earnings quality. Earnings quality has been measured by four attributes of accrual quality, earnings persistence, earnings predictability, earnings smoothness. A sample of 325 non-financial PSX listed Firms have been selected and classified into four unique categories on the basis of financial health (healthy and distressed) and ownership (family and non-family). The classification aims to determine level of earnings quality for each category. Results find significant effect of book financial position and ownership structure on earnings quality of firms. Findings reveal Earnings quality for non distressed family (NDF) firms was highest followed by non distressed non family firms (NDNF), while earnings quality for distressed family (DF) firms was poor and poorer for distressed non family (DNF) firms when firms were classified into these four categories. These results provide important implications for investors, analysts, regulators and standard setters.

Analysis of Earnings Management: Using Ownership Structure and Audit Quality Among Banking Industries in Indonesia

Purpose: This research aims to examine the impact of ownership structure consisting of managerial ownership, institutional ownership and audit quality which is proxied using size of public accountant firms on earnings management using three control variables, namely company size, leverage and market value.Design/Methodology/Approach: The population used in this research is banking companies listed on the Indonesian Stock Exchange for the 2020-2022 period. The data used in this research is secondary data and the sampling technique selection used is purposive sampling. There were 35 companies in the sample with a total of 105 data points at the beginning, after the outlier elimination process the final data amounted to 87 data points. The analytical method used to test the hypothesis in this research uses multiple linear regression analysis.Findings: The results of this research show that managerial ownership and audit quality have a significant negative effect on earnings management, while institutional ownership has a significant positive effect on earnings management.Originality: This study uses a sample of banking companies in Indonesia. Control variables were added by researchers when testing the influence of research variables. Agency theory is used to explain the relationship between managerial ownership, institutional ownership and audit quality with earnings management.

Effect of Ownership Structure on Financial Performance: Evidence from Listed Airlines in Africa

Objective: This study empirically examines the impact of ownership structure on the financial performance of listed airlines in Africa. Design/Methods/Approach: The research utilized quantitative techniques to collect secondary data from listed airlines over ten years (2010-2019). Descriptive statistics and multiple regression were used for analysis. Findings: The results revealed that airlines with the majority of private domestic and private foreign ownership showed a significant positive effect on financial performance (ROA and ROE). In contrast, state ownership had an insignificant impact on airlines' financial performance. The study supports the property rights theory, emphasizing the importance of private ownership in airlines. Originality/Value: This study adds to the existing literature by providing evidence on how ownership structure influences financial performance in African airlines, contributing to aviation research. Practical/Policy Implication: The findings suggest that private and foreign investors should consider acquiring controlling airline stakes to enhance financial performance. Policymakers should aim to create flexible laws and regulations that attract domestic and foreign private investors to the aviation sector, potentially fostering improved management practices and policy developments.

Impact of ownership structure on stock liquidity in financial crisis

Ownership structure is one of the important issues faced by companies. Especially, it plays a vital role in stock market liquidity. Prior studies have established links between ownership structure, firm performance, and stock liquidity, but their results are mixed and inconclusive. The importance in this research is to study the effect of ownership structure on stock market liquidity in a context characterized by its concentration and where there is an excess of certain types of stockholders, including institutional investors or family members. Therefore, we choose to explore this relationship in French-listed companies. In addition, the role that ownership structure plays is considered as important. The expectation of managers and shareholders is to determine the optimal ownership structure that protects companies in normal situations, and in crisis as well. Therefore, this study explores the role ownership structure plays in determining the stock liquidity during and after the financial crisis period from 2003 to 2015. After employing the panel regression method, we report a nonlinear relationship between ownership structure and stock liquidity during and after the global financial crisis. Institutional ownership, although having a strong effect in the post-crisis period (2010–2015), shows no influence on liquidity during the crisis (2008––2009). We also find that family ownership shows no significant effect in the crisis period (2008–2009) and the post-crisis period (2010–2015). However, it has a significant coefficient during the period 2003–2015.

Analysis of The Influence of Institutional Ownership, Managerial Ownership, and Ownership Structure on Company Financial Performance: Case Study of Manufacturing Companies In Indonesia

This research aims to analyze the impact of institutional ownership, managerial ownership, and ownership structure on the financial performance of manufacturing companies in Indonesia. Financial performance is measured using various indicators such as profitability, liquidity, and leverage. The study is based on data from a number of manufacturing companies in Indonesia during the period 2020-2022. The results of the analysis indicate that institutional ownership has a significant positive impact on the financial performance of companies, suggesting that the presence of institutional shareholders can enhance efficiency and profitability. On the other hand, managerial ownership also contributes positively to financial performance, indicating that active management participation in share ownership can drive growth and profitability. However, the research findings show that the impact of ownership structure varies depending on the financial performance indicators considered. There are significant differences in the influence of ownership structure on profitability, liquidity, and leverage of the companies. This research provides valuable insights for stakeholders, regulators, and company owners in understanding the role of institutional ownership, managerial ownership, and ownership structure in enhancing the financial performance of manufacturing companies in Indonesia. The practical implications of these findings can help companies in making better decisions regarding share ownership and financial strategies.

Exploring the Impact of Ownership Structure and CEO Power on CSR and Firm Performance in Pakistan: A Comparative Study of Pre, Post and Covid Era as an Emerging Economy

The primary purpose of this research is to acquire a profound comprehension of the impacts of Corporate Social Responsibility (CSR) on the operations of firms and on society as a whole, with Pakistan serving as the focal point of the research. This study's objective is to determine whether or not there is a moderating effect of CEO power on the relationships that exist between CSR, ownership concentration, and efficient business practices. In-depth research has been conducted on fifty different non-financial enterprises in Pakistan to see how well they performed before, during, and after the Covid-19 Pandemic. On the data that has been gathered, descriptive statistics and regression analysis have been carried out with the assistance of SPSS. The research found that in the middle of the Covid-19 outbreak in Pakistan, the degree of authority held by CEOs had a major impact on the dynamics of the economy. The authority of the Chief Executive Officer (CEO) has a significant impact on the relationship between corporate social responsibility (CSR) and the performance of an organization. Even in a developing country like Pakistan, the present study highlights the importance of corporate social responsibility (CSR) and the positive influence it may have on the bottom line of a firm. The purpose of this study is to investigate the beneficial benefits that corporate social responsibility (CSR) has on society, with a particular emphasis on emerging countries such as Pakistan. This research serves as a useful guide by emphasising how important CSR is for linking together the success of businesses and the well-being of the society in which they operate.

Exploring the Impact of Ownership Structure and CEO Power on CSR and Firm Performance in Pakistan: A Comparative Study of Pre, Post and Covid Era as an Emerging Economy

The primary purpose of this research is to acquire a profound comprehension of the impacts of Corporate Social Responsibility (CSR) on the operations of firms and on society as a whole, with Pakistan serving as the focal point of the research. This study's objective is to determine whether or not there is a moderating effect of CEO power on the relationships that exist between CSR, ownership concentration, and efficient business practices. In-depth research has been conducted on fifty different non-financial enterprises in Pakistan to see how well they performed before, during, and after the Covid-19 Pandemic. On the data that has been gathered, descriptive statistics and regression analysis have been carried out with the assistance of SPSS. The research found that in the middle of the Covid-19 outbreak in Pakistan, the degree of authority held by CEOs had a major impact on the dynamics of the economy. The authority of the Chief Executive Officer (CEO) has a significant impact on the relationship between corporate social responsibility (CSR) and the performance of an organization. Even in a developing country like Pakistan, the present study highlights the importance of corporate social responsibility (CSR) and the positive influence it may have on the bottom line of a firm. The purpose of this study is to investigate the beneficial benefits that corporate social responsibility (CSR) has on society, with a particular emphasis on emerging countries such as Pakistan. This research serves as a useful guide by emphasising how important CSR is for linking together the success of businesses and the well-being of the society in which they operate.

Ownership structure and agency costs: evidence from the insurance industry in Jordan

PurposeThis study investigated the impact of corporate ownership structure on agency costs in the insurance industry.Design/methodology/approachThe study sample included 23 insurance companies listed on the Amman Stock Exchange (ASE) from 2010 to 2019. Panel regression was used to account for the firm- and time-specific unobservable variables and system-GMM estimation was used to address endogeneity concerns.FindingsThe results show that managerial ownership positively (negatively) affects selling, general and administrative (SG&A) expenses (assets turnover), implying that unmonitored managers engage in activities that serve their own interests rather than those of shareholders. The largest shareholder's ownership has no impact on agency costs, implying that the ownership of the largest shareholder is irrelevant. However, as the wedge between the percentage of capital owned by the largest shareholders and managers increases, SG&A expenses (efficiency ratio) decrease (increases), indicating that the existence of large non-management shareholders reduces agency costs. After accounting for the endogeneity problem, the impact of ownership structure on agency costs measured by asset turnover remains robust.Originality/valueTo the best of the authors' knowledge, this study is the first to provide unique evidence and useful insights into the determinants of agency costs from a frontier market in the Middle East and North Africa (MENA), with a focus on the insurance sector. Additionally, this study uses a new measure of separation between ownership and control by calculating the wedge between managers' and large shareholders' ownership.