Influence Of Ownership Concentration Research Articles

The Influence of Ownership Concentration on Sustainable Merger and Acquisition Performance: Navigating Principal Conflicts in the Korean Market

This study examines the dynamics of owner behavior, agency costs, and M&A outcomes in the Korean market, aiming to explore how ownership concentration influences conflicts among principal groups and impacts M&A performance. Using empirical data from Korean M&A transactions, we analyze the effects of ownership concentration and cash payment preferences on firm value. Our findings indicate that while ownership concentration can reduce owner–manager conflicts, it heightens principal–principal conflicts, especially with moderate ownership, weak governance, or financial distress. Control-focused owners prefer cash payments, which can lower acquiring firm announcement returns under high ownership concentrations. Effective governance is crucial for fostering responsible decision-making and sustainable practices in M&As. This research underscores the importance of balanced ownership structures and robust governance mechanisms in mitigating agency conflicts and promoting sustainable M&A performance.

Factors Affecting the Financial Performance of the Food and Beverage Subsector on the Indonesian Stock Exchange

Financial performance is an important factor for decision-making in companies. The aim of this research is to determine the effect of ownership concentration, operating efficiency and cash holdings on financial performance with control variables, namely company size, debt ratio and growth opportunities. The novelty in this research is the operating efficiency variable. Population that was used in this study are food and beverage companies listed on the Indonesia Stock Exchange for the period 2018 - 2022. The number of samples in this research was 22 companies. The method used in this research is panel data regression using the Eviews 9 application. The outcome from this research shows that ownership concentration has a significant positive value on financial performance and debt ratio as control variable has a significant negative value on financial performance. The expected benefits that will be obtained from this research is to increase insight into the influence of ownership concentration on financial performance, both for managers in managing individual or organizational ownership to improve financial performance and for investors as a consideration before spending their capital.

Influence of Ownership Concentration on Financial Performance of Listed Firms in Nairobi Securities Exchange, Kenya

The purpose of the study was to evaluate the influence of ownership concentration on the financial performance of listed firms in the Nairobi Securities Exchange, Kenya. For this study, the target population is represented by several companies from different sectors listed on the NSE in Kenya from 2016-2020. The study used data from firms that were consistently listed in NSE from 2016 – 2020 the ones that were delisted and or suspended and that were listed after 2016 was not included, creating a sample size of 55 firms yielding a panel of 275 data points. The study adopted a purposive sampling approach since it satisfied the criteria of my study. The study used secondary data obtained from annual audited financial statements of listed firms using data collection sheets. The results showed that local ownership concentration had a negative and insignificant effect on financial performance using ROA. However, local ownership concentration had a negative and little impact on financial performance using ROE (r=-0.055, p=0.334). Further results showed that government ownership concentration had a negative and significant impact on financial performance using ROA (r=-0.107, p=0.008). However, government ownership concentration had a positive and insignificant influence on financial performance using ROE. In addition, results further showed that foreign ownership concentration negatively and significantly influenced financial performance using ROA (r=-0.072, p=0.205). However, foreign ownership concentration had a positive and insignificant impact on financial performance using ROE. The study also concluded that ownership concentration has a significant influence on the financial performance of listed firms in Nairobi Securities Exchange, Kenya using ROA {F=35.88, p=0.000)} with overall R Square of 0.250 but had no significant influence on the financial performance of listed firms in Nairobi Securities Exchange, Kenya using ROE {F=4.910, p=0.437)} with overall R Square of 0.105. The study recommends that there should be a substantial shareholding with a sizable number of shares to take control of the company's performance with passion and interest.

Dividend payout decisions under uncertainty: the ownership influence in the early days of the COVID-19 pandemic in Finland

PurposeThis paper examines whether ownership type has a moderating influence on dividend payouts during the COVID-19 pandemic crisis with respect to changes in profits. Future uncertainties because of the pandemic will result in a perceived need for liquidity within the company, but retaining cash may be risky for shareholders who could look for less risky alternatives. The dividend payout strategy is thus even more closely related to the overall type concentration and strategy of the owners during the crisis.Design/methodology/approachThe effects are explored and tested on early data from 2019 to 2020 of Finnish companies using ANCOVA while controlling for profitability and sector variables.FindingsA significant effect on dividend payout during the COVID crisis was found when the companies are dominantly held by individual owners validating early suggestions on such an influence. Therefore, this study contributes further to the academic debates on the influence of ownership concentration in times of crises. This study lists certain sectors which experience diminished profits during such a crisis which pinpoints sector separation in future discussions.Research limitations/implicationsThis study explores early data from a specific context in the Nordic countries. However, it does so out of purpose as explained in the paper.Practical implicationsOwnership type and concentration matters when it comes to dividend payout decisions under uncertainty with regard to changes in profit. Investors need to accept these behavioural insights into their decisions.Originality/valueThis study examines the signalling effect of dividends by analysing how actual or anticipated change in profitability due to a crisis is reflected by owners and leads to dividend payout decisions under uncertainty.

The Moderating Role of Ownership Concentration on the Relationship between Board Composition and Saudi Bank Performance

The main purpose of this study is to investigate the potential effect of ownership concentration on the relationship between board composition and bank performance. The study employs a sample of Saudi banks listed on Saudi stock exchange (TADAUWL) over the period from 2011 to 2018. To test the study hypotheses and control for endogeneity issues, the Ordinary Least Square (OLS) and the Two-Stage Least Squares (2SLS) techniques are used. The empirical results reveal a significant negative moderating effect of ownership concentration on the association between board composition and bank performance, which confirms the study argument and supports hypotheses. The results indicate that board composition in terms of independent board members, executive board members, and non-executive board members in banks with higher ownership concentration have a weaker positive influence on bank performance. For control variables, the results are almost consistent with theoretical perspectives and previous empirical evidence. The results of this study have important implications for regulatory authorities, companies, and market participants in Saudi Arabia and countries with high concentrated ownership to understand how ownership concentration could affect corporate governance and firm performance and to identify appropriate actions to protect board composition from the influence of ownership concentration.

The influence of ownership concentration and export in a performance factor of publicly traded companies of B3.

Multinational companies positively impact the growth of emerging countries and to the detriment of this, studies of how these companies operate and generate value is also growing positively in the academic field. Questions widely studied as performance and ownership concentration are now being evaluated in an international context performance. This is at the expense of high concentration is a common feature of developing countries such as Brazil, and due to export strategy occur due to the quest for increased performance and wealth maximization. In view of this, this study sought to determine the influence that the ownership concentration ally export has on a performance factor developed for this work. The results showed that the export relates U-shaped with the variable performance and interaction export-concentration showed a positive relationship with the variable of interest. As future work, it is suggested to add other internationalization variables to consider more ways to foreign entry.

Ownership Concentration and Firm Performance in Indonesia

AbstractObjective – The study aim to investigate the effect of ownership concentration on the financial performance of firms listed in the Indonesian Stock Exchange from 2008 to 2012. Design/methodology – Data for the study were collected from the Indonesia Stock Exchange on or prior to 2 January 2008 and remain listed until 31 December 2012. The population is 140 industrial and manufacturing companies listed on the Indonesia Stock Exchange. But, there are only 43 companies meet the sampling criteria. To investigate the influence of ownership concentration on firm performance in Indonesia, multiple linear regression method was performed. Results – The results of this study is the ownership concentration positively and significantly influences firm performance in Indonesia and it acts as a substitute for shareholder protection. Research limitations/implications – The samples are only collected from manufacturing industry and does not take into account the shareholder identity. It is quite possible that shareholder identity influences the relationship between ownership concentration and firm performance. Therefore, future researchers are advised to take into account the shareholder identity so that it becomes clear whether shareholder identity indeed has an effect on such relationship.

The Influence of Ownership Concentration on Firm Resource Allocations to Employee Relations, External Social Actions, and Environmental Action

Objective – The purpose of this work is to examine the influence ofownership concentration on the funds allocated to CSR in Brazilian firm.Design/methodology/approach – Econometric models have beenestimated, with an index of CSR as the dependent variable, andownership concentration as the explanatory variable, together withrelevant control variables suggested in the literature (profitability,leverage, growth opportunities, and firm size). A Brazilian CSR databasehas been built using data extracted from two different sources, onerelative to CSR data and another that provides ownership structure andfinancial data. CSR policy is proxied by an index obtained as the ratiobetween funds directed to social action (employee relations, externalsocial actions, and environmental action) and net sales.Findings – The findings indicate that CSR is positively influenced byfirm ownership concentration in Brazil.Practical implications – The positive influence of ownershipconcentration on CSR may be an indication that large controllingshareholders of Brazilian firm may be considering CSR as an effectiveway to improve the image and reputation of the firm and its owners. Thisbelief may be stimulating CSR projects and their disclosure in Brazil.Originality/value – This work is an additional contribution to thedebate about the role played by ownership structure on CSR. Takinginto account that the central point of Stakeholder Theory is a firm’sconcern with all its stakeholders, the research builds on Stakeholderand Agency Theories by assessing the influence of large controllingshareholders on a firm’s social concerns.

The Influence of Ownership Concentration on Firm Resource Allocations to Employee Relations, External Social Actions, and Environmental Actions

The Influence of Ownership Concentration on Firm Resource Allocations to Employee Relations, External Social Actions, and Environmental Actions

The Impact of Ownership Concentration on Firm Value. Empirical Study of the Bucharest Stock Exchange Listed Companies

The aim of this study consists in providing the first empirical evidence for the companies listed in Romania regarding the influence of ownership concentration on firm value. The empirical research was employed for a sample of companies listed on the Bucharest Stock Exchange (BSE), over the period 2007-2011, being estimated multivariate regression models for panel data, unbalanced, with fixed effects. The value of the companies was measured out by the instrumentality of Tobin's Q ratio, however adjusted with the purpose of taking into account the industry membership diversity of the selected sample. We considered distinctly the ownership of the first, the second, and the third largest shareholder, as well the sum of holdings of the two largest shareholders and the sum of holdings of the three largest shareholders. Therefore, the results sustain a lack of influence on firm value exhibited by the first largest shareholder, while the second largest shareholder positively influences firm value. By considering the ownership of the third largest shareholder we identified a positive influence, but down to a level of holdings of 13.08 percent, thereupon the influence becomes negative. Thereby, beyond the identified threshold we could perceive the reduction of the third largest shareholder’ concern regarding the process of directors’ monitoring, thus following the own aims’ achievement. Further, from the ownership concentration perspective only the sum of holdings of the three largest shareholders positively influences firm value. However, there was not identified any statistically significant relationship between the sum of holdings of the two largest shareholders and firm value. Accordingly, the results are influenced by the context of an underdeveloped Romanian capital market within the first largest shareholder ownership discourages the occurrence of another investors holding significant stakes.

Ownership Structure and Female Directors on Two-Tier Boards: Evidence from Polish Listed Companies

Research question/issue: This study examines how ownership structure affects the presence of female directors on supervisory and management boards and the related advantages of gender diversity in the boardroom. It was conducted in a post-communist country and the argument is that the process of privatization affected corporate ownership structures and also, indirectly, board structures. Research findings/insights: The study uses data on 403 Polish companies listed on the Warsaw Stock Exchange. A total of 1,862 observations were made for the period between 2005 and 2010. Having analyzed the panel data, several phenomena were identified: the negative influence of ownership concentration on the number of women on supervisory and management boards, the positive influence of foreign investors ownership on the number of women on supervisory boards, the positive influence of the management board members’ share in the ownership of the company on the number of women on supervisory boards, the positive influence of state ownership on the number of women on supervisory and management boards, the positive influence of institutional investors on the number of women on supervisory and management boards. At the same time, the number of women on supervisory and management boards was low. This indicates that investors appoint women as token directors and companies do not utilize the advantages of board gender diversity. Theoretical/academic implications: This work also confirmed the influence of historical path dependence on the number of women on boards. Therefore, it is difficult to apply the results of studies conducted around the globe to the situation of an individual country. Thus, further research is needed concerning the influence of historical, cultural and institutional factors on the efficiency of various corporate governance mechanisms. Practitioner/policy implications: The study presented in this paper may contribute to the intensification of the discussion on the small number of women on company boards in post-communist Central and Eastern European countries. It is very important for policy makers, whose task is to undertake actions leading to the utilization of gender diversity advantages. The study also shows that despite the numerous benefits connected with the greater role of women on company boards, investors in Polish companies still do not make full use the available intellectual and social capital.

Ownership Concentration, Family Control, and Auditor Choice: Evidence from an Emerging Market

This empirical study extends the existing, yet limited, literature on the influence of ownership concentration and family control on auditor choice. Following prior studies, a firm is considered using a higher-quality audit when its external auditor is one of Big 4 audit firms. The sample consists of 787 firm-year observations of public firms listed on the Indonesia Stock Exchange (IDX) in the financial years 2005-2007. Empirical evidence obtained reveals that firms with larger ownership concentration are more likely to hire a Big 4 auditor. Hence, in such firms, high-quality audits are employed to mitigate agency issues. However, when the controlling shareholder is a family, the association between ownership concentration and demands for high-quality auditors turns negative, implying that family-controlled firms tend to sustain opaqueness gains by hiring lower-quality auditors.

Pengaruh Konsentrasi Kepemilikan, Penggeseran Risiko dan Pentransferan Sumber Daya Trhadap Ekspropriasi Pemegang Saham Minoritas Perusahaan Pengakuisisi: Pengujian Empiris Terhadap Pergeseran Konflik Keagenan

This study provides empirical evidence of agency conflict shifting (La Porta et al. 1998, 1999) by investigates the influence of ownership concentration, risk shifting and tunneling on expropriation of acquirers’ minority shareholders. Sample in this study consist of 40 non financial and banking companies which perform internal acquisition during 1993-2002. Consistent with earlier prediction, the higher risk shifting, the higher expropriation of acquirers’ minority shareholders. Conversly, the evindences that ownership concentration does not significantly influence on, and tunneling has significantly negative influence on expropriation of acquirers’ minority shareholders are not consistent with ealier predictions. Additional test of dividend payment show that firm decreased the paid dividend to shareholders after performing internal acquisition. One of cause the decreasing is the existence of specific boundaries in debt contract to fund internal acquisition. These support agency conflict shifting prediction.