The Impact of Chilean Firms' Ownership Structures on Performance and Disclosure Levels

This paper examines the impact of ownership structure on the voluntary disclosure in the annual reports of Malaysian listed firms. The result shows that there is an increase in the extent of voluntary disclosure in Malaysian listed firms over the eleven-year period from 1996 to 2006. Ownership concentration consistently shows positive association with voluntary disclosure. Firms with higher foreign and institutional ownership have a significantly positive association with voluntary disclosure levels while firms with family ownership exhibit lower voluntary disclosure. Consistent with agency theory, different ownership structures have varied monitoring effects on agency costs and clearly influence firm’s disclosure practices. The findings provide insights to policy makers and regulators in their desire to increase transparency and accountability amidst the continual enhancement of corporate governance. The findings provide evidence that optimized ownership structure in any jurisdiction should be considered in any regulatory process that seeks to improve transparency.

Download Full-text

The impact of corporate governance and ownership structure reforms on earnings quality in China

International Journal of Accounting and Information Management ◽

10.1108/ijaim-05-2014-0035 ◽

2015 ◽

Vol 23 (2) ◽

pp. 169-198 ◽

Cited By ~ 18

Author(s):

Xu_Dong Ji ◽

Kamran Ahmed ◽

Wei Lu

Keyword(s):

Corporate Governance ◽

Ownership Structure ◽

Earnings Quality ◽

Future Research ◽

Governance Mechanisms ◽

Content Type ◽

Listed Firms ◽

Ownership Structures ◽

Corporate Governance Mechanisms ◽

The Impact

Purpose – The purpose of this paper is to investigate the effect of corporate governance and ownership structures on earnings quality in China both prior and subsequent to two important corporate reforms: the code of corporate governance (CCG) in 2002 and the split share structure reform (SSR) in 2005. Design/methodology/approach – This study utilises informativeness of earnings (earnings response coefficient), conditional accounting conservatism and managerial discretionary accruals to assess earnings quality using 12,267 firm-year observations over 11 years from 2000 to 2010. Further, two dummy variables for measuring the changes of CCG and SSR are employed to estimate the effects of CCG and SSR reforms on earnings quality via OLS regression. Findings – This study finds that the promulgation of the CCG in 2002 has had a positive impact, but the SSR reform in 2005 has had little effect on listed firms’ earnings quality in China. These results hold good after controlling for a number of ownership, governance and other variables and estimating models with multiple measures of earnings’ quality. Research limitations/implications – Future research could focus on how western style corporate governance mechanisms have been constrained by the old management systems and governmental dominated ownership structures in Chinese listed firms. The conclusion is that simply coping Western corporate governance model is not suitable for every country. Practical implications – The results will assist Chinese regulators in improving reporting quality, ownership structure and governance mechanisms in China. The results will help international investors better understand quality of financial information in China. Originality/value – This is the first to our knowledge that addresses the effects of major governance and ownership reforms together on accounting earnings quality and, thus, makes a significant contribution on understanding the effect of regulatory reforms on improving earnings quality. In doing so, it also indirectly assesses the effectiveness of western-style corporate governance mechanisms introduced in China.

Download Full-text

Corporate governance, family firms, and innovation

Corporate Ownership and Control ◽

10.22495/cocv18i1art11 ◽

2020 ◽

Vol 18 (1) ◽

pp. 138-151

Author(s):

Brian Bolton ◽

Jung Eung Park

Keyword(s):

Corporate Governance ◽

Family Firms ◽

Governance Mechanisms ◽

Managerial Entrenchment ◽

Ownership Structures ◽

Corporate Governance Mechanisms ◽

Dual Class ◽

The Impact ◽

Comprehensive Study ◽

Board Ownership

We provide a comprehensive study of how corporate governance influences innovation at family firms. Specifically, we consider productive innovation or the impact that R&D spending has on firm revenues. First, we find that family firms do indeed generate more productive innovation than non-family firms, perhaps because they are better able to have a longer-term perspective. We then show how different corporate governance mechanisms influence this relationship. In general, board ownership and CEO ownership are associated with more productive innovation at all firms. Importantly, we find that managerial entrenchment leads to more productive innovation in general, consistent with prior research; however, contrary to prior research, we do not find this result at family firms, suggesting that it’s the ownership relationship, not managerial entrenchment, that drives innovation. We also find that independent boards are associated with greater innovation at family firms but not at non-family firms. Finally, we find that dual-class share structures are harmful for innovation at all firms. Our primary contributions are identifying how firms with different ownership structures focus on creating productive innovation and analyzing how ownership structures interact with different corporate governance mechanisms to allow the firm to make longer-term investments in innovation.

Download Full-text

The Impact of the Changed Financial Environment on Rangeland Management and Ownership Structures.

The Rangeland Journal ◽

10.1071/rj9930167 ◽

1993 ◽

Vol 15 (1) ◽

pp. 167

Author(s):

JW Chudleigh

Keyword(s):

Commodity Prices ◽

Bank Lending ◽

Rangeland Management ◽

Agricultural Resources ◽

Ownership Structures ◽

Financial Conservatism ◽

Economic Developments ◽

The Impact ◽

Financial Environment ◽

Economic Imperative

The dramatic change in the western world's economic environment is characterised by lower inflation, unserviceable indebtedness, lower commodity prices, greater environmental awareness and a complete readjustment of values and bank lending policies as an era of greater financial conservatism develops. An understanding of this historic turning point in economic developments, especially in Australia, brings into question many established concepts of management of our agricultural resources. This paper questions whether these changes demand a more dramatic rethink of the management of our western lands to ensure that the economic imperative of profit (the driving force for private occupancy of pastoral areas) can sit comfortably with the environmental responsibility being increasingly demanded by society.

Download Full-text

Improving board diversity around the world: the role of institutional investors

Journal of Financial Reporting and Accounting ◽

10.1108/jfra-03-2021-0076 ◽

2021 ◽

Vol ahead-of-print (ahead-of-print) ◽

Author(s):

Badar Alshabibi

Keyword(s):

Institutional Investors ◽

Estimation Methods ◽

Board Diversity ◽

Content Type ◽

Negatively Associated ◽

Ownership Structures ◽

Institutional Settings ◽

Age Diversity ◽

The Impact

Purpose This study aims to examine the role of institutional investors in improving board diversity for the companies in which they invest (investee companies) using evidence from corporate board characteristics across the globe. Additionally, this study also investigates the association between institutional investors and board diversity under various institutional settings, including varying economic conditions (pre-crisis, crisis and post-crisis), legal systems and ownership structures. Design/methodology/approach Using a sample collected from 15 countries for the period 2006 to 2012, the paper uses panel data analysis to examine the association between institutional investors and board diversity. Findings The study provides evidence that institutional investors do not promote board diversity and show that in general there is no association between institutional ownership and various board diversity attributes such as gender, age, nationality and education. However, the study finds that institutional investors are positively associated with the educational diversity of boards during times of crisis and are negatively associated with board age diversity during pre-crisis and post-crisis periods. Furthermore, while in common law countries institutional investors are found to be negatively associated with board age diversity, they do not influence board diversity outcomes (i.e. gender, age, nationality and education) in civil law countries. The results also show that the associations between institutional investors and board diversity are mixed and insignificant according to different ownership structures (family and non-family owned firms). The main findings of the study are robust and apply to various estimation methods. Originality/value This study provides a unique perspective on the impact of institutional investors on board diversity using a sample collected from 15 countries. Furthermore, the study provides an insight that the institutional settings should be considered when investigating the activism of institutional investors in improving governance practices.

Download Full-text

Impact of Ownership Structure on Firm Performance in the MENA Region: An Empirical Study

Accounting and Finance Research ◽

10.5430/afr.v6n3p105 ◽

2017 ◽

Vol 6 (3) ◽

pp. 105 ◽

Cited By ~ 3

Author(s):

Neveen Ahmed ◽

Ola Abdel Hadi

Keyword(s):

Firm Performance ◽

Ownership Structure ◽

Positive Impact ◽

Mena Region ◽

Positive Role ◽

Insider Ownership ◽

Mena Countries ◽

Ownership Structures ◽

Firm Financial Performance ◽

The Impact

This paper investigates the impact of ownership structures on firm financial performance in the MENA region. The sample covers nine MENA countries (Egypt, Bahrain, Qatar, Kuwait, Tunisia, UAE, Morocco, Oman and Jordan) for the year 2014. We examine the impact of ownership structures on firm performance. Performance is proxied by Tobin-Q, ROE and ROA, while ownership structure is proxied using insider ownership, governmental, and blockholders. We control for risk, size, country effect and industry type. Our results suggest that blockholders, insider ownership and governmental ownership play a crucial role in firm performance measured by Tobin-Q, ROE and ROA respectively. Our results suggest that insider ownership negatively effects firm’s return on equity, while blockholder ownership has a positive impact on a firm’s Tobin-Q. Finally we find that governmental ownership plays a positive role on a firm’s return on assets in the MENA region.

Download Full-text

Political behavior in family- and founder-controlled firms

Journal of Family Business Management ◽

10.1108/jfbm-02-2015-0009 ◽

2016 ◽

Vol 6 (2) ◽

pp. 186-206 ◽

Cited By ~ 1

Author(s):

Susan Clark Muntean

Keyword(s):

Political Behavior ◽

Family Members ◽

Campaign Contributions ◽

Publicly Traded ◽

Content Type ◽

Family Control ◽

The Public ◽

Ownership Structures ◽

Key Stakeholders ◽

The Impact

Purpose – The political behavior of founders, families and their firms in the form of campaign contributions has not been explored by family business scholars. Yet partisan and ideological campaign contributions raise a range of governance issues and hold implications for myriad stakeholders, including investors, employees, customers and the public. The purpose of this paper compares and contrasts the campaign contributions of founder- and family-controlled firms relative to managerially governed firms and develops theoretical explanations for observed differences. Design/methodology/approach – This paper develops a “principal owner” hypothesis based upon a typology of firm ownership characteristics (founder/family control or not; publicly traded or privately held). This hypothesis is tested by multivariate empirical analyses of the campaign contributions of 251 firms across 14 industries with four types of ownership structures. Findings – Founder- and family-controlled firms are more partisan and ideological relative to other firms in their industry and this finding is consistent across industries. Founders and family members influence political behavior, including in publicly traded firms. Practical implications – Given potential controversies raised by ideological and partisan campaign contributions and the unpredictable returns on political investment, it behooves founders and their family members to assess the impact of their political behavior on the business and on key stakeholders. Originality/value – This paper is the first to raise governance issues related to founders’ and families’ political spending and develops original insights into the ideological and political behavior of these businesses.

Download Full-text

OWNERSHIP STRUCTURES, INVESTORS CONFIDENCE AND FINANCIAL DECISIONS IN FAMILY FIRMS: EVIDENCE FROM GCC MARKETS

IBT Journal of Business Studies ◽

10.46745/ilma.jbs.2018.14.01.05 ◽

2018 ◽

Vol 14 (1) ◽

pp. 52-68

Author(s):

Muhammad Sadiq Shahid ◽

Keyword(s):

Ownership Structure ◽

Family Firms ◽

Stock Exchange ◽

Annual Reports ◽

Stock Exchanges ◽

Investment Funds ◽

Financial Decisions ◽

Ownership Structures ◽

The Family ◽

The Impact

The objective of this study is to examine the impact of financial decisions on the ownership structure. This study adopted two themes of ownership structure (e.g., 25% & 50%) that categorized the family-owned firms (FOF) and non-family firms (NFOF). The data was collected from 286 firms listed at GCC stock exchanges annual reports, stock exchange database, and Data Stream that range from 2010-2016 periods. The findings of this study showed that the FOFs have lesser investment-internal fund sensitivity than NFOFs. Though, there is an insignificant effect of the block holder on investment funds sensitivity. However, the little implication of dividend payout in FOFs as compare to NFOFs was disclosed in the results. Moreover, it wrapped up that there are less agency problems and information asymmetry in FOFs comparatively.

Download Full-text

The Effect of IAS-24 Disclosures on Governance Mechanisms and Ownership Structures in Pakistan

Lahore Journal of Business ◽

10.35536/ljb.2016.v5.i1.a2 ◽

2016 ◽

Vol 5 (1) ◽

pp. 15-36

Author(s):

Abdul Rafay Abdul Rafay ◽

Ramla Sadiq ◽

Mobeen Ajmal

Keyword(s):

Corporate Governance ◽

Firm Performance ◽

Financial Reporting ◽

Negative Impact ◽

Positive Impact ◽

Stock Exchange ◽

Institutional Ownership ◽

Governance Mechanisms ◽

Ownership Structures ◽

The Impact

IAS-24 of the International Financial Reporting Standards focuses on the concept and disclosures of related party transactions (RPTs) for a reporting entity. This study examines the interrelationship between RPTs (as disclosed under IAS-24), agency theory, ownership structures and firm performance. Our sample includes nonfinancial companies indexed by the KSE-100 of the Pakistan Stock Exchange during 2006–15. To run the regression models, we determine the regression assumptions, normality, heteroskedasticity, autocorrelation and multicollinearity. We investigate the impact of different RPTs, including cash inflows and outflows, whereas other studies generally look at the impact of RPTs on firm performance in totality. The empirical analysis suggests that institutional ownership has a positive, significant impact on firm performance. Related party purchases have a significant, negative impact on performance, resulting in the expropriation of institutional ownership. RPTs that generate revenues have a significant, positive impact on performance, such that institutional ownership has a propping-up effect with respect to the related parties. In practice, institutional ownership leads to strong corporate governance and contributes to firm performance. While other studies find family ownership responsible for the expropriation effect, we argue that institutional ownership has a propping-up and expropriation effect on related parties. Our study also suggests that certain ownership structures lead to weaker corporate governance mechanisms, resulting in greater agency problems. This, in turn, badly affects company performance and leads to the exploitation of minority shareholders.

Download Full-text

International ownership and firm performance in Arab economies

Corporate Ownership and Control ◽

10.22495/cocv17i4siart8 ◽

2020 ◽

Vol 17 (4, Special Issue) ◽

pp. 308-318

Author(s):

Stefan Lutz ◽

Karim Hegazy ◽

Ehab K. A. Mohamed ◽

Mohamed A. K. Basuony

Keyword(s):

Firm Performance ◽

Ownership Structure ◽

Business Environment ◽

State Ownership ◽

Mena Region ◽

Cross Sectional ◽

Ownership Structures ◽

And Performance ◽

The Impact ◽

Better Than

This paper aims at filling existing research by examining the impact of corporate governance and ownership structure on firm performance using cross-sectional data from companies in the MENA region for the years 2009-2013. The results indicate that higher ownership concentration is associated with higher returns. Furthermore, firms with higher international ownership share tend to perform better than those with only local private and/or state ownership. The results suggest some prevalent features with respect to ownership and performance of firms in the MENA region. Due to the volatile social and business environment, these firms operate in, they may be particularly dependent on effective ownership structures and support which may be provided by international, institutional, and large shareholders.

Download Full-text