scholarly journals Exploring non-linear relationship between foreign ownership and firm performance

2021 ◽  
Vol 18 (3, special issue) ◽  
pp. 257-274
Author(s):  
Neeraj Gupta ◽  
Tarun Agarwal ◽  
Bhagwan Jagwani
Keyword(s):  
Firm Performance ◽  
Linear Relationship ◽  
Foreign Ownership ◽  
Individual Investors ◽  
Non Linear ◽  
Effect Estimation ◽  
Institutional Shareholders ◽  
Relationship Of ◽  
The Impact ◽  
The Relationship

This study aims to examine the impact of foreign ownership on the performance of Indian firms. Additionally, it also analyses the non-linear relationship of foreign ownership with firm performance. A panel data approach has been used in this study. Specifically, the fixed effect estimation technique is used to examine the relationship between foreign ownership and firm performance during the period 2009–2010 to 2018–2019. The foreign institutional shareholders and the foreign corporate bodies hold more shareholding than the foreign individual investors. The authors find that foreign institutional investors and foreign corporate bodies bear a positive relationship with the performance of Indian firms. Additionally, foreign ownership shows a non-linear relationship with firm performance. The results are robust across the various proxies of firm performance, and sub-samples based on foreign ownership

scholarly journals Uncovering the Relationship of Supply Chain Management and Firm Performance: Evidence from Textile Sector of Pakistan

2018 ◽  
Vol 10 (2) ◽  
pp. 23-29
Author(s):  
Zahid Hussain ◽  
Ahmad Bin Jusoh ◽  
Muhammad Sarfraz ◽  
Khalil Ur Rehman Wahla
Keyword(s):  
Supply Chain ◽  
Supply Chain Management ◽  
Firm Performance ◽  
Research Paper ◽  
Chain Management ◽  
Relationship Of ◽  
The Impact ◽  
The Relationship ◽  
Textile Sector

The purpose of this research paper was to find the impact of the supply chain on firm performance in Textile firm of Pakistan. Data was collected through questioners in the month of March 2018, Approximately 30 questioners were distributed among the managers of the ten textile organizations in Faisalabad which are expected to have the best knowledge about the supply chain operations and its impact on the performance of the organization, all of them responded positively. It is found that dimensions associated with SCM methods as well as explain the connection amongst SCM methods, aggressive benefit, as well as firm performance. The actual study focuses on the causal associations in between SCM exercise, aggressive benefit as well as firm performance as well as ignores the actual feasible recursive associations.  

scholarly journals Government Size and Corruption: A Non-linear Analysis in the Case of EMCCA

2021 ◽  
Vol 12 (4) ◽  
pp. 17
Author(s):  
Assoumou Ondo ◽  
Beau Jency Owono Ondo
Keyword(s):  
Linear Relationship ◽  
Central Government ◽  
Central Africa ◽  
Linear Analysis ◽  
Government Size ◽  
Economic Community ◽  
Non Linear ◽  
The Government ◽  
The Impact ◽  
The Relationship

This article analyzes the relationship between Government size and corruption. Unlike the works in the way which suppose a linear relationship between the two variables, we estimate a panel with change of the modes to characterize the impact of the size of the Central Government on corruption, in the countries of the economic community and monetary of Central Africa (EMCCA). The results show that there is a non-linear relationship between these two variables. Indeed, a strong involvement of the Government in economic activity results in a significant increase in corruption when the Government exceeds a size of 13.5508% of the GDP.

scholarly journals Ownership structure and firm performance: Evidence from Nigerian listed companies

2011 ◽  
Vol 8 (4) ◽  
pp. 391-400
Author(s):  
Adebiyi J. Abosede ◽  
Kajola Oluwafemi Sunday
Keyword(s):  
Firm Performance ◽  
Financial Performance ◽  
Linear Relationship ◽  
Ownership Structure ◽  
Significant Relationship ◽  
Listed Companies ◽  
Firm Financial Performance ◽  
Non Linear ◽  
The Relationship

This paper examines the relationship between firms’ ownership structure and financial performance in Nigeria, using a sample of thirty listed companies between 2001 and 2008. Using pooled OLS as a method of estimation and after controlling for four firm-specific characteristics, our results show a negative and significant relationship between ownership structure (director shareholding) and firm financial performance (ROE). This is in support of Entrenchment hypothesis. Also, our study does not support a non-linear relationship between ownership structure and firm performance.

scholarly journals Executive compensation and firm performance: a non-linear relationship

2019 ◽  
Vol 17 (2) ◽  
pp. 1-17 ◽  
Author(s):  
Rijamampianina Rasoava
Keyword(s):  
Firm Performance ◽  
Executive Compensation ◽  
Linear Relationship ◽  
South African ◽  
Boards Of Directors ◽  
Company Size ◽  
Executive Pay ◽  
Optimal Contracting ◽  
Non Linear ◽  
The Impact

In order to ensure profitability for shareholders, optimal contracting recommends the alignment between executive compensation and company performance. Large organizations have therefore adopted executives remuneration systems in order to induce positive market reaction and motivate executives. Complex compensation schemes are designed by Boards of Directors using strong pay-performance incentives that explain high levels of executive pay along with company size, demand for management skills and executive influence. However, the literature remains inconclusive on the pay-performance relationship owing to the various empirical methods used by researchers. Additionally, there has been little effort in the literature to compare methodologies on the pay-performance relationship. Using the dominant agency theory framework, the purpose of this study is to establish and examine the relationship between firm performance and executive pay. In addition, it intends to assess the characteristic of model specifications commonly adopted. To this aim, a quantitative analysis consisting of three complementary methods was performed on panel data from South African listed companies. The results of the main unrestricted first difference model indicate a strong non-linear relationship where the impact of current and previous firm performance on executive pay can be observed over 2 to 4-year period providing support to the optimal contracting theoretical perspective in the South African business context. In addition, CEO pay is more sensitive to firm performance as compared to Director pay. Lastly, although it affects executive pay levels, company size is not found to improve the pay-performance relationship.

scholarly journals The impact of individual and institutional ownership on the firm performance: Evidence from Pakistan Stock Exchange

2021 ◽  
Vol 2 (2) ◽  
pp. 150-167
Author(s):  
Muhammad Sadil Ali ◽  
Lubna Riaz ◽  
Wasif Anis
Keyword(s):  
Firm Performance ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Decision Makers ◽  
Individual Investors ◽  
Financial Decisions ◽  
The Individual ◽  
The Impact ◽  
Individual Ownership ◽  
The Relationship

The study aims to examine the relationship between individual ownership, institutional ownership and firm performance. Further it comparatively analyses the impact of both institutional and individual ownership on firm performance. For this purpose, data have been collected from 64 firms listed on Pakistan Stock Exchange (PSX) for the period of 10 years (2011 - 2020). Random effects model has been employed to test the research hypotheses. This study compares the effect of individual and institutional ownership on firm performance. Result of the study shows that both institutional and individual ownership significantly affect firm performance. However, the degree of the effect is different for both individual and institutional investors. The institutional ownership influences the firm performance twice than the individual investors influence the performance. The results also reveal that the firm performance is positively associated with the firm size while negatively related with the financial leverage. Findings of the study are important for shareholders, managers, academicians and decision makers. They can use information to frame investors’ friendly policies and guide shareholders in taking right financial decisions.

scholarly journals An examination of the effect of supply chain disruption risk drivers on organizational performance: evidence from Chinese supply chains

2021 ◽  
Vol ahead-of-print (ahead-of-print) ◽  
Author(s):  
Mahour Mellat Parast ◽  
Nachiappan Subramanian
Keyword(s):  
Supply Chain ◽  
Firm Performance ◽  
Supply Chain Performance ◽  
Supply Chain Disruption ◽  
Content Type ◽  
Disruption Risk ◽  
Relationship Of ◽  
The Impact ◽  
Disruption Risks ◽  
The Relationship

Purpose This paper aims to examine the relationship of supply chain disruption risk drivers to supply chain performance and firm performance outcomes. Design/methodology/approach Four disruption risk drivers for a supply chain are identified, namely, demand disruption risk, supply disruption risk, process disruption risk and environment disruption risk. A cross-sectional survey was developed and data was collected from 315 Chinese firms to determine the relationship of supply chain disruption risks to supply chain performance and firm performance. Findings The empirical findings show that supply disruption risks and process disruption risks have a significant impact on supply chain performance. In addition, this paper shows that supply disruptions, demand disruptions and process disruptions are significantly related to firm performance. This paper shows that supply chain disruption risks have different effects on supply chain performance and firm performance. Managers should be aware that disruption risk drivers can have an impact on firm performance that is different from their impact on supply chain performance. An important finding of the study is that the magnitude of the impact of disruption risks on supply chain performance is greater on the upstream side of the supply chain than on the downstream side of the supply chain. Originality/value This is one of the early studies to examine the effect of supply chain disruption risk drivers on both firm performance and supply chain performance. An important finding of the study is that the magnitude of the impact of disruption risks on supply chain performance is greater on the upstream side of the supply chain than on the downstream side of the supply chain.

Foreign ownership and performance: mediating and moderating effects

2019 ◽  
Vol 29 (2) ◽  
pp. 86-102
Author(s):  
Vicky Ching Gu ◽  
Ray Qing Cao ◽  
John Wang
Keyword(s):  
Firm Performance ◽  
International Diversification ◽  
Foreign Ownership ◽  
Competitive Environment ◽  
Organizational Strategies ◽  
Content Type ◽  
Financial Measures ◽  
And Performance ◽  
The Impact ◽  
The Relationship

Purpose Although foreign ownership has been widely studied to show its impact on firm performance, the findings are mixed and the underlying rational to explain the impact is not entirely clear. The purpose of this study is to determine if there is a direct relationship between foreign ownership and performance or if this relationship is indirect and affected by mediating and moderating variables such as international diversification and competitive environment. Design/methodology/approach Financial data, survey data and other financial measures for known indices are used in the research, and SPSS and SEM (Stata 15) analyses are used to test empirically derived hypotheses. Findings Results from this study indicate that the relationship between foreign ownership and firm performance is mediated by international diversification, such that higher levels of both foreign corporate and foreign institutional ownership lead to higher levels of international diversification, which then lead to higher levels of firm performance. Results from this study also indicate that the competitive environment moderates the relationship between a firm’s level of international diversification and performance, such that the effect of international diversification on performance is greater as the environment becomes more competitive. Practical implications This study provides empirical evidence for managers to seriously consider the impact of foreign ownership on decisions involving international diversification, along with competitive environment, when formulating and implementing organizational strategies. Originality/value This study extends prior research examining the effects of foreign ownership on firm performance by uniquely showing how international diversification mediates the relationship between foreign ownership and firm performance and how the competitive environment moderates the relationship between international diversification and firm performance.

scholarly journals The impact of corporate governance measures on firm performance: the influences of managerial overconfidence

2021 ◽  
Vol 7 (1) ◽  
Author(s):  
Tolossa Fufa Guluma
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Market Competition ◽  
Debt Financing ◽  
Ownership Concentration ◽  
Managerial Behavior ◽  
Managerial Overconfidence ◽  
Relationship Of ◽  
The Impact ◽  
The Relationship

AbstractThe paper aims to investigate the impact of corporate governance (CG) measures on firm performance and the role of managerial behavior on the relationship of corporate governance mechanisms and firm performance using a Chinese listed firm. This study used CG mechanisms measures internal and external corporate governance, which is represented by independent board, dual board leadership, ownership concentration as measure of internal CG and debt financing and product market competition as an external CG measures. Managerial overconfidence was measured by the corporate earnings forecasts. Firm performance is measured by ROA and TQ. To address the study objective, the researcher used panel data of 11,634 samples of Chinese listed firms from 2010 to 2018. To analyze the proposed hypotheses, the study employed system Generalized Method of Moments estimation model. The study findings showed that ownership concentration and product market competition have a positive significant relationship with firm performance measured by ROA and TQ. Dual leadership has negative relationship with TQ, and debt financing also has a negative significant association’s with both measures of firm performance ROA and TQ. Moreover, the empirical results also showed managerial overconfidence negatively influences the relationship of board independence, dual leadership, and ownership concentration with firm performance. However, managerial overconfidence positively moderates the impact of debt financing on firm performance measured by Tobin’s Q and negative influence on debt financing and operational firm performance relationship. These findings have several contributions: first, the study extends the literature on the relationship between CG and a firm’s performance by using the Chinese CG structure. Second, this study provides evidence that how managerial behavioral bias interacts with CG mechanisms to affect firm performance, which has not been studied in previous literature. Therefore, the results of this study contribute to the theoretical perspective by providing an insight into the influencing role of managerial behavior in the relationship between CG practices and firm performance in an emerging markets economy. Hence, the empirical result of the study provides important managerial implications for the practice and is important for policy-makers seeking to improve corporate governance in the emerging market economy.

scholarly journals The non-linear relationship between managerial ownership and firm performance

2007 ◽  
Vol 4 (4) ◽  
pp. 89-101 ◽  
Author(s):  
Damiano Bonardo ◽  
Stefano Paleari ◽  
Silvio Vismara
Keyword(s):  
Firm Performance ◽  
Linear Relationship ◽  
Ownership Structure ◽  
Operating Performance ◽  
Managerial Ownership ◽  
Non Linear ◽  
Negative Effect ◽  
And Performance ◽  
The Relationship ◽  
Positive Effect

We investigate the relationship between operating performance and ownership structure using a sample of Italian IPO-firms in the period 1995-1999. Overall, we find that their performance declines after the IPO. We find evidence of a non-linear relationship between ownership and performance using different measures of operating performance and managerial ownership. This result supports the hypothesis of a combined effect of ownership on firm performance, with a positive effect at low and high levels of managerial ownership (alignment of interest hypothesis) and a negative effect at intermediate levels (entrenchment hypothesis)

scholarly journals Non-linear relationship between foreign currency derivatives and firm value: evidence on Sharīʿah compliant firms

2021 ◽  
Vol 28 (2) ◽  
pp. 156-173
Author(s):  
Zaminor Zamzamir@Zamzamin ◽  
Razali Haron ◽  
Zatul Karamah Ahmad Baharul Ulum ◽  
Anwar Hasan Abdullah Othman
Keyword(s):  
Risk Management ◽  
Linear Relationship ◽  
Firm Value ◽  
Dynamic Panel Data ◽  
Content Type ◽  
Quality Reporting ◽  
Linear Framework ◽  
Non Linear ◽  
The Impact ◽  
The Relationship

PurposeThis study examines the impact of hedging on firm value of Sharīʿah compliant firms (SCFs) in a non-linear framework.Design/methodology/approachThis study employs the system-GMM for dynamic panel data to examine the influence of derivatives usage on firm value (Tobin's Q, ROA and ROE). The sample comprised of 59 non-financial SCFs engaged in derivatives from 2000 to 2017 (18 years). The Sasabuchi-Lind-Mehlum (SLM) test for U-shaped is performed to confirm the existence of the non-linear relationship.FindingsThis study concludes that hedging significantly contributes to firm value of SCFs based on the non-linear framework. This study suggests that, first, the non-linear relationship occurs due to the different degree of derivatives usage and risk. Second, firms practice selective hedging to maintain the upside potential of firm value.Research limitations/implicationsThis study has important implications. First, the importance of risk management via derivatives to increase firm value, second, the evidence of selective hedging from the non-linear relationship between derivatives and firm value and third, the need for quality reporting on derivatives engagement by firms in line with the required accounting standard on derivatives.Originality/valueThis study fills the gap in the literature in relation to the risk management strategies of SCFs in three aspects. First, re-examines the relationship using recent data. Second, examines the relationship in the non-linear framework as the limited studies found in the literature on Malaysian firms are only based on linear relationship. Third, determines whether hedging undertaken by firms is optimal as this can only be addressed using the non-linear framework. This study is robust to the various definitions of firm value (Tobin's Q, ROA and ROE) and non-linear methodologies.

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