Levels Of Managerial Ownership Research Articles

Creditor protection and asset-debt maturity mismatch: a quasi-natural experiment in China

ABSTRACT Recently, the Chinese Government has strengthened the enforcement of bankruptcy laws to protect creditors’ rights. This study shed light on the effect of creditor protection on asset-debt maturity mismatch by employing a quasi-natural experiment in China. The results show that creditor protection mitigates maturity mismatch, and the effect is more pronounced among financially constrained firms. Results remain robust after the dynamic effects test, placebo test, propensity score matching approach, entropy balancing method, and controlling for COVID-19 shocks. Mechanism tests show that creditor protection decreases the cost of debt and reduces over-investment. The effect of creditor protection is pronounced in private companies, financially independent companies, and companies with secured loans. Creditor rights can alleviate maturity mismatch in firms with medium ownership concentration and managerial ownership levels. Economic consequences studies suggest that creditor protection reduces corporate default risk. This study reveals the mechanism and effect of creditor protection on asset-debt maturity mismatch in emerging markets, providing recommendations to policymakers for assessing and improving bankruptcy law regimes.

The Influence of Good Corporate Governance on The Company's Financial Performance

This research investigates the impact of Good Corporate Governance (GCG) on the financial performance of property companies listed on the Indonesia Stock Exchange (BEI) from 2018 to 2023. Key governance variables include the board of commissioners, board of directors, audit committee, institutional ownership, and managerial ownership. A quantitative associative method was utilized, with data collected from the annual reports of 31 property companies selected via purposive sampling. The analysis was conducted using multiple linear regression with SPSS 25 software. The study reveals that the board of commissioners, board of directors, and audit committee positively and significantly affect financial performance. Conversely, institutional and managerial ownership show a significant negative impact. These findings underscore the importance of effective governance structures in enhancing company performance. Larger boards of commissioners and directors, along with an active audit committee, contribute to better financial outcomes. However, higher levels of institutional and managerial ownership may lead to decisions that negatively affect performance. Good Corporate Governance practices significantly influence the financial performance of property companies. This research provides valuable insights for improving governance frameworks to enhance financial health in the property sector.

The Influence of Leverage, Managerial Ownership, Liquidity, and Firm Size on Financial Performance in Basic Materials Companies Listed on the Indonesia Stock Exchange

The study aims to explore the significant influence of leverage, managerial ownership, liquidity, and firm size on financial performance, as assessed through DAR (Debt to Asset Ratio), managerial ownership levels, CR (Current Ratio), LN (natural logarithm), and ROA (Return on Asset). The research sample comprises 89 companies that were listed on the Indonesia Stock Exchange between 2020 and 2022, including those submitting annual financial reports for the same period. Purposive sampling was employed in selecting the sample. Data analysis relied on secondary data obtained through documentation methods. The audited financial reports sourced from the Indonesia Stock Exchange's official website served as the research data. The concurrent findings of the study indicate that the effects of business size, liquidity, managerial ownership, and leverage are negligible. Partial results suggest that, collectively, the independent variables do not significantly impact the dependent variable.

Effect of Management Ownership, Industry Auditor Specialization, Audit Complexity and Auditor Switching on Timeliness of Financial Reporting

This study aims to determine the effect of managerial ownership, auditor industry specialization, complexity audit, and auditor switching on the timeliness of submitting financial reports to Energy sector companies listed on the Indonesia Stock Exchange in 2017-2021. The method in this research is a quantitative research method. The population in this study are energy sector companies listed on the Indonesia Stock Exchange during 2017-2020. The sampling technique in this study used a purposive sampling technique with 41 research samples within five years so that a total of 205 research data were obtained. Data analysis used descriptive statistical analysis method and logistic regression analysis using SPSS 26 software. The results showed that managerial ownership, auditor industry specialization, audit complexity had a positive effect on the timeliness of financial reporting, while switching auditors did not affect on the timeliness of financial reporting. The accuracy of submitting financial statements to companies tends to be influenced by factors such as high levels of managerial ownership, auditor industry specialization, and audit complexity, but the presence of switching auditors in the company does not affect the time of submission of financial statements.

Managerial ownership and the effectiveness of internal control

This paper examines the impact of managerial ownership on the effectiveness of internal control in China's stock markets, focusing on the perspective of managerial ownership. The findings reveal a significant quadratic non-linear relationship, characterized by an inverted-U shape, between the level of managerial ownership and the effectiveness of internal control for the overall population of listed companies. Notably, the inverted U-shaped effect of managerial ownership on internal control is observed to be more delayed in non-state-owned listed companies. However, these companies exhibit a stronger incentive effect, and the 'Entrenchment Effects' become apparent at an earlier stage.

Leverage and Dividend Policy: Evidence from the Indonesian Stock Exchange

Aims: This research aims to determine the effect of ownership based on managerial and institutional on the leverage and corporate dividends.
 Study Design: We analyzed the correlation between leverage and dividends interaction in several companies listed on the Indonesian Stock Exchange.
 Methodology: Some hypotheses were created and then tested using an equation model. Some equations used in this model can generate an equation system that can describe the variables' dependencies. Furthermore, the two-stage least square (TSLS) method was used as the estimation technique.
 Results: A high level of managerial ownership can decrease leverage and corporate dividend payments. Also, high external capital is needed to increase dividend payments to achieve high asset growth.
 Conclusion: In contrast, high sales growth can decrease the leverage, but increased profitability may lower the dividend payments. Using high force means reducing dividend payments. This research provides information and data as a basis for consideration, support, and sources of thought to management as decision-makers to improve company performance and business development. This research implies that companies can use it as a reference in making financial decisions about the company's business strategy to improve its performance to have a competitive advantage and avoid financial distress.

The Role of Ownership and Gender on Firms' Performance: Evidence from Portugal

This work aims to examine the relationship between corporate governance (CG) and corporate performance, considering the effect of the COVID-19 pandemic. We consider a sample of Portuguese-listed firms for the period between 2010 and 2020 using a panel data methodology. The main results show that higher levels of managerial ownership and gender diversity may drive higher firm performance. However, no evidence was found that a representation of three or more female directors leads to an increase in performance. Moreover, the results suggest that there is a negative relationship between leverage and performance when we consider a market-based performance measure. Finally, the study found evidence that the COVID-19 pandemic had a negative impact on corporate performance. This study sheds light on the role of ownership and gender on firms' performance. The results of this research can have some implications for academia and policymakers' decisions.

Corporate governance and capital structure: dynamic panel threshold analysis

ABSTRACT This paper examines the nonlinear connection between corporate governance (CG) and corporate leverage. Our study applied the dynamic panel threshold model (DPTM) to facilitate the capture of the nonlinear effect of CG on a firm’s leverage for Japanese listed companies. Additionally, our study sought to demonstrate the linkage between CG and the speed of adjustment (SOA), particularly following the reforms in Japan’s CG system, to reach a targeted level of leverage. The empirical findings confirm the presence of the threshold influence of managerial ownership and board size, thus confirming their nonlinear impact on capital structure. Moreover, at a low level of managerial ownership, the SOA for firms to achieve the optimal level of leverage is faster than it is for firms with a high level of managerial ownership (MO), while firms with a larger board achieve their targeted level of leverage quicker than firms with a smaller board. Our findings indicate that recent reforms in Japan’s CG system seem to have been inefficient, with no positive effect on corporate leverage.

Social capital and management commitment

ABSTRACT This study examines the role of social capital in fostering beneficial managerial behaviour that serves the interests of shareholders. Specifically, this research focuses on the effects of social capital on managerial ownership and dividend payout policy. We document evidence demonstrating that firms with headquarters in high social capital regions are associated with higher managerial ownership and greater dividend payouts to shareholders. Our findings are consistent with the notion that social capital induces cooperative norms and alleviates agency frictions between managers and shareholders. Additional analysis indicates that managerial ownership increases after a firm moves its headquarters to a county with higher social capital, while dividend payouts do not exhibit a significant change after relocation. In further tests, we find that the association between social capital and managerial ownership weakens after SOX, but that the association between social capital and dividend payouts does not. Finally, we show that both civic norms and associational networks influence the level of managerial ownership and dividend payouts. Overall, our study adds to the literature by deepening the understanding of the impact of social capital in shaping good managerial behaviour at the individual and corporate levels.

Managerial Incentives and the Valuation of International Joint Venture Formation

Strategic management decisions and actions involving international joint venture formations are significant to many firms and have major economic consequences. Previous empirical evidence on the effects of joint venture formation announcements on shareholder wealth reveals that firm value is more often positively impacted. However, many previous analyses of shareholder wealth from joint venture formations do not fully explore cross-sectional differences in managerial incentives to pursue these international investments. The primary purpose of this study is to exploit these cross-sectional differences using agency theory to explain managerial behavior and subsequent shareholder effects. This study capitalizes on agency theory’s notion that managers are not necessarily motivated solely by the maximization of firm value, but instead are interested in maximizing their own utility. The study’s findings are consistent with agency theoretic hypotheses based on a broad cross-section of international joint ventures. Results demonstrate that shareholder returns to international joint venture formation exhibit considerable variability and, importantly, are at least partially explained by cross-sectional differences in agency incentives. Specifically, returns to shareholders are positively related to the level of managerial ownership and inversely related to the level of free cash flow. Moreover, a positive relation is found between shareholder returns and the joint interaction between leverage and free cash flow. These findings indicate that the effect of international joint venture formation on shareholder value is not uniform and, more importantly is at least partly influenced by managers’ agency incentives.

The Impact of Capital Structure and Ownership Structure on Financial Performance: A Study on the KSE 100 Listed Firms in the Pakistan Stock Exchange

Purpose: This research study aimed to examine the impact of capital structure and ownership structure on the financial performance of KSE-100 index firms on the Pakistan Stock Exchange.
 Design/Methodology/Approach: 100 listed companies have been selected as sample for the study but due to data limitations, 90 companies' annual data has been used for 2009-2018. Ordinary least square regression was used on the panel data for analysis. Two measures of capital structure (debt-to-equity ratio and debt to total assets) while three measures of ownership structure (Foreign ownership, Institutional ownership, and managerial ownership) have been used to determine their impact on three financial performance measures (return on assets, return on equity, and Tobin's).
 Findings: The results of this study showed that there is a significant negative relationship between financial performance and capital structure. Ownership structure and firm financial performance showed a significant positive relationship when measured on the basis of foreign ownership and institutional ownership while insignificant and negatively related to managerial ownership.
 Implications: This study suggests that organizations should take financing decisions in accordance with optimum capital structure because more debt decreases financial performance. Furthermore, a decision should be taken the encouragement of foreign and institutional shareholding, while the level of managerial ownership should be lessened to enhance financial performance

Effect of Managerial Ownership, Audit Committee, Profitability and Leverage on Accounting Conservatism

Abstract
 This study aims to examine the effect of managerial ownership, audit committee, profitability and leverage on accounting conservatism. The population in this study are manufacturing companies listed on the Indonesia Stock Exchange during the 2015-2019 period. The sampling technique in this study used purposive sampling. The total data used in this study was 494 data during the 2015-2019 period. The analytical technique used in this research is multiple regression analysis. This analysis test was carried out using PLS. The dependent variable in this study is accounting conservatism. Meanwhile, the independent variables in this study are managerial ownership, audit committee, profitability, and leverage. The results of this study indicate that managerial ownership does not affect accounting conservatism. This is because the average level of managerial ownership is low and share ownership does not come only from managerial. The audit committee and profitability affect accounting conservatism where the more members of the audit committee and the higher the profitability value, the higher the accounting conservatism. Meanwhile, the higher the leverage value, the lower the accounting conservatism.
 Key Words: managerial ownership, audit committee, profitability, leverage, accounting conservatism.

Does compliance with corporate governance increase profitability? Evidence from an emerging economy: Pakistan

Corporate governance reforms have evolved over time, but few studies have addressed firm compliance with corporate governance standards in the context of an emerging market like Pakistan. We build a Corporate Governance Compliance Index for public firms in Pakistan for 2008–2018. Our index consists of six subindices based on the key parameters of governance outlined by the Code of Corporate Governance of Pakistan. Our analysis shows that increased compliance predicts higher firm performance but entails greater compliance costs. Board Structure and Functions & Responsibilities of Audit Committee drive the compliance-performance relationship, which is affected by levels of managerial ownership and ownership concentration.

R&D expenditure and managerial ownership: evidence from firms of high-vs-low R&D intensity

PurposeCorporate managers spend on research and development (R&D) for reasons of growth and survival. However, they may be less willing to invest in R&D because of its long-term horizon, high failure rate and uncertain outcomes. This study aims to explore the extent to which managerial ownership influences R&D expenditure decisions.Design/methodology/approachApart from the linear regression models, this study uses a semi-parametric quantile regression analysis for a sample of German non-financial firms throughout 2009–2018.FindingsThis study finds a nonmonotonic sensitivity of R&D spending to the level of managerial ownership over various quantiles of R&D distribution. That is, managerial ownership increases the expenditure on R&D at low R&D intensity firms. However, it decreases the expenditure on R&D at high R&D intensity firms. These results suggest the presence of a maximum level of R&D expenditure, after which owner-managers would be unwilling to spend on R&D.Practical implicationsThe results confirm the importance of corporate ownership structure for firm R&D and innovation activities. It provides an implication for corporate policymakers to reform the corporate ownership structures to encourage corporate managers and owners to invest in R&D projects.Originality/valueThis study offers two distinct contributions study. First, it provides the first German shred of evidence on the nonlinear relationship between managerial ownership and R&D expenditure decisions by distinguishing between high and low R&D intensity firms. Second, unlike prior research, it uses a semi-parametric quantile regression analysis. This method is more efficient than least-squares estimators and produces robust estimators to heteroscedasticity of the residuals.

The Effect of Ownership Structure, Audit Committee, Company Size, and Audit Quality on the Integrity of Financial Statements on Manufacturing Companies Listed on IDX

A list of financial data (e.g., account balances, transactions, and changes in value) is given over a period of time. This information may be utilized by readers of financial statements to help them make economic choices. So, the businesses that want to be trusted must provide honest financial accounts. The study sought to investigate the relationships between several measures of corporate control, management control, the audit committee, and size, on the accuracy of financial statements for manufacturer companies listed on the IDX. The population utilized in this study consists of 169 businesses, while the sample is made up of just 43 companies. This study used the assistance of SmartPLS software to analyze the information. The study's findings indicate that Institutional Ownership and the Audit Committee are linked to financial statements' integrity. Meanwhile, these three factors (i.e., size of the company, level of managerial ownership, and audit quality) have no impact on the financial statements' integrity.

How does ownership by corporate managers affect R&D in the UK? The moderating impact of institutional investors

PurposeThis paper tests for a positive, a negative and a nonlinear relationship between the share of ownership controlled by firm managers and the management decision to invest in research and development (R&D). Likewise, it examines whether or not institutional investors induce corporate managers with ownership stakes to spend on R&D.Design/methodology/approachIt examines a sample of the United Kingdom (UK) Financial Times Stock Exchange (FTSE) all-shares firms over a longitudinal period from 2009 to 2018. The R&D is measured by the natural logarithm of a firm's R&D spending and a firm's R&D expenditure scaled by its total assets at the end of the year. The results are estimated using the year/industry fixed effects as well as the firm fixed effects.FindingsThe results show a positive effect on R&D spending at a lower level of managerial ownership, and a negative impact at a higher managerial ownership level. The findings jointly suggest an inverse U-shaped nonlinear relationship between ownership by firm managers and management decisions on R&D spending. The results also demonstrate that the effect of institutional investors' ownership on R&D spending decisions is observable only at a lower level of managerial ownership and disappears at a higher level.Practical implicationsThe results shed the light on the role of managerial ownership in promoting firm innovation. They suggest an optimal level of equity ownership by corporate managers that maximizes R&D spending, implying that firms can effectively manage their R&D spending by restructuring their managerial ownership to maintain an appropriate level of managerial ownership to align managerial interests with shareholder interests by either increasing it to the optimal level or decreasing it when it becomes above this level. The findings also support the limited degree of monitoring and the long-term perspective offered by institutional investors in the UKOriginality/valueThe study provides new evidence on the non-monotonic effect of the share of ownership controlled by firm managers on R&D spending decisions. It also expands the growing body of literature and contributes to the debate on the effectiveness of institutional investors in the UK.

Corporate immunity to the COVID-19 pandemic

We evaluate the connection between corporate characteristics and the reaction of stock returns to COVID-19 cases using data on more than 6,700 firms across 61 economies. The pandemic-induced drop in stock returns was milder among firms with stronger pre-2020 finances (more cash and undrawn credit, less total and short-term debt, and larger profits), less exposure to COVID-19 through global supply chains and customer locations, more corporate social responsibility activities, and less entrenched executives. Furthermore, the stock returns of firms controlled by families (especially through direct holdings and with non-family managers), large corporations, and governments performed better, and those with greater ownership by hedge funds and other asset management companies performed worse. Stock markets positively price small amounts of managerial ownership but negatively price high levels of managerial ownership during the pandemic.

How fintech impacts pre‐ and post‐loan risk in Chinese commercial banks

AbstractDue to information asymmetry in the lending market, credit activities inevitably cause pre‐ and post‐loan risk in banks. To explore whether these risks can be alleviated by fintech and study its specific mechanism from the perspective of managers, we investigate on a sample from the establishment of fintech subsidiaries in Chinese commercial banks during 2014–2018. The results show that fintech can alleviate pre‐loan risk associated with credit activities, and this negative effect is more pronounced in banks with higher level of managerial ownership. As the control of post‐loan risk is more dependent on the regulators, fintech in banks has no significant effect on reducing post‐loan risk associated with credit activities. This paper adds empirical evidence on the role of fintech in banks.

Managerial Ownership and Financial Performance of the Nigerian Listed Firms: The Moderating Role of Board Independence

The existing literature documents inconsistent results regarding the effect of managerial ownership on firms’ performance level. This study integrates insights from agency and resource dependency theories and model board independence to account for these indeterminate empirical results that prior research exhibited. Hence, this research aims at investigating the moderating effect of board independence on the relationship between managerial shareholding and financial performance of the Nigerian listed firms. The article analysed the balanced panel data of 71 listed companies covering the period from 2012-2018, by exploiting a generalised method of moments framework. The paper presents evidence of a strong negative relationship between managerial ownership and firm performance level. However, the direct effect of board independence on performance shows a positive but insignificant coefficient. More importantly, evidence from this study suggests that the magnitude and direction of the association between managerial ownership and firm performance depend on the levels of board independence. Thus, revealing that firms with a substantial number of independent directors on their boards are likely to neutralise the entrenchment behaviour that a higher managerial shareholding induces. Consequently, this research recommends that companies should constitute their boards with a considerable number of independent directors to enhance their bottom line.

THE ROLE OF DUALITY MANAGERIAL OWNERSHIP AND BOARDS ON IPO VALUE (AN EMPIRICAL EVIDENCE OF INDONESIAN FIRMS)

The research aims to find the impact of ownership retention, managerial ownership, and boards on value IPO premium and underpricing. We investigate by using hand collect data 202 IPO prospectuses during 2008-2017 and using Warp PLS 5.0 to compute the data. Our finding suggests that may use to guide the investor in making informed decisions to see the level of the proportion of sharehold by old ownership and management. When the high level of ownership retention and managerial ownership, make the value IPO premium and underpricing will be high. On the other hand duality of the managerial role in firms making the value will be achieved. This paper contributes to the value of IPO premium and underpricing literature when influence by ownership share on initial public offerings context of emerging markets.Keywords: Ownership retention; Managerial Ownership; Boards; IPO premium; underpricing