Browse > Article
http://dx.doi.org/10.13106/jafeb.2020.vol7.no8.451

Protection of Minority Shareholder Investment in the Small and Medium-sized Enterprises  

KANTHAPANIT, Chinnapat (Faculty of Accounting and Management, Mahasarakham University)
KANTHAPANIT, Chutiya (Faculty of Accounting and Management, Mahasarakham University)
Publication Information
The Journal of Asian Finance, Economics and Business / v.7, no.8, 2020 , pp. 451-459 More about this Journal
Abstract
This study aims to examine the relationship of the four factors that increase the protection of minority shareholder investment. The factors are non-controlling shareholders, corporate governance, free cash flow, and shareholder wealth. The data for this study is obtained from the 2017 annual reports of 136 Thai public companies listed in the Market of Alternative Investment of Thailand (MAI). The analysis uses a multiple regression model to determine which factors encourage and which inhibit the protection of minority shareholder investment. The study tests four hypotheses. The results rejected H1 because non-controlling shareholders have negatively correlated with minority shareholder investment protection (beta -0.155 and p-value 0.050). The results accepted H2, H3 and H4 as follows. H2: corporate governance has positively correlated with minority shareholder investment protection (beta 0.17 and p-value 0.031). H3: free cash flow has positively correlated with minority shareholder investment protection (beta 0.214 and p-value 0.007). H4: shareholder wealth has positively correlated with minority shareholder investment protection (beta 0.318 and p-value 0.000). The major findings suggest strong minority shareholder investment protection was enhanced by increasing corporate governance, free cash flow and shareholder wealth. The protection of minority shareholder investment needs to reduce non-controlling shareholding pattern.
Keywords
Small and Medium-sized Enterprises; Minority Shareholder; Investment Protection; Corporate Governance; Cash Flow; Shareholder Wealth;
Citations & Related Records
연도 인용수 순위
  • Reference
1 Eisenhardt, K. M. (1989). Agency theory: An Assessment and Review Academy of Management Review, 14(1), 57-74.   DOI
2 Eldomiaty, T. I., & Choi, C. J. (2006). Corporate governance and strategic transparency: East Asia in the international business systems. Corporate Governance, 6(3), 281-295.   DOI
3 Franklin A. (2005). Corporate Governance in Emerging Economies. Oxford Review of Economic Policy, 21(2), 164-177.   DOI
4 Franks, J., & Mayer, C. (1994). The ownership and control of German corporations. London Business School UK.
5 Jensen, M. C. (1986). Agency Costs of Free Cash Flow, Corporate Finance, and Takeovers. American Economic Review, 76(2), 323-329.
6 Jensen M. C., & Meckling, W. (1976). Theory of the firm: Managerial behavior, Agency costs and Ownership Structure. Journal of Financial Economics, 3(4), 305-360.   DOI
7 Johnson, S., Booneb, P., Breachc, A., & Friedmand, E. (2000). Corporate governance in the Asian financial crisis. Journal of Financial Economics, 58(1-2), 141-186.   DOI
8 Maher, M. E., & Andersson, T. (1999). Corporate Governance: Effects on Firm Performance and Economic Growth: Organisation for Economic Co-operation and Development.
9 Nam, S.-W., & Nam, C. (2004). Corporate Governance in Asia: Recent Evidence from Indonesia, Republic of Korea, Malaysia, and Thailand. Manila, Philippines: Asian Development Bank.
10 OECD. (2015). G20/OECD Principles of Corporate Governance. Turkey: The Organisation for Economic Co-operation and Development.
11 Shleifer, A., & Vishny, R. W. (1997). A Survey of Corporate Governance Journal of Finance, 52, 737-738.   DOI
12 Siamwalla, A. (2001). Picking up the peices: Banks and corpoarte restructuring in post - 1997 Thailand. Paper presented at the The subregional Seminar on Financial and Corporate Sectors Restructuring in East and South-East Asia, Seol, Korea.
13 Stock Exchange of Thailand. (2020). Distribution of Minority Shareholdings (Free Float). Retrieved April 9, 2020, from https://www.set.or.th/en/regulations/simplified_regulations/free_float_p1.html
14 Sturm, M., & Nüesch, S. (2019). Strong shareholder rights, internal capital allocation efficiency, and the moderating role of market competition and external financing needs. Review of Managerial Science, 13(1), 93-111.   DOI
15 Sundaravej, T., & Trairatvorakul, P. (1989). Experiences of financial distress in Thailand (pp. 33). Bangkok: The Bank of Thailand.
16 The Stock Exchange of Thailand. (2017). Structural Group of Indutries in MAI. Retrieved January 12, 2017, from: https://www.set.or.th/mai/th/company/industry_group_p1.html
17 The Stock Exchange of Thailand. (2018). Data by Listed Company, 2018. Retrieved April 20, 2019 from: https://www.set.or.th/set/commonslookup.do?language=th&country=TH
18 Udayasankar, K., & Das, S. S. (2007). Corporate Governance and Firm Performance: the effects of regulation and competitiveness Corporate Governance: An International Review, 15(2), 262-271.   DOI
19 Sakawa, H., & Watanabel, N. (2019). Family control and ownership monitoring in Stakeholder-oriented corporate governance. Management Decision, 57(7), 1712-1728. https://doi.org/10.1108/MD-04-2018-0480   DOI
20 Weinstein, D. E., & Yafeh, Y. (1998). On the costs of a bank-centered financial system: Evidence from the changing main bank relations in Japan. Journal of Finance, 53(2), 635-672.   DOI
21 Brigham, E. F., & Ehrhardt, M. C. (2004). Financial Management: Theory & Practice. The United States of America: Thomson South-Western.
22 Aguilera, R. V., & Cuervo-Cazurra, A. (2004). Codes of Good Governance Worldwide: What is the Trigger? . Organization Studies, 25(3), 417-446. doi: 10.1177/0170840604040669
23 Berle, A., & Means, G. (1932). The Modern Corporation and Private Property. New York, NY: World Inc.
24 Bougie, R., & Sekaran, U. (2016). Research method for business: A skill building approach. West Sussex, UK.: John Wiley & Sons.
25 Claessens, S., Djankov, S., Fan, J., & Lang, L. (1999). Expropriation of minority shareholders in East Asia. Washington, DC: The World Bank.
26 Croci, E., & Petmezas, D. (2010). Minority Shareholders' Wealth Effects and Stock Market Development: Evidence from Increase-in-Ownership M&As Journal of Banking & Finance, 34(3), 681-694. doi: https://doi.org/10.1016/j.jbankfin.2009.09.003   DOI
27 Davis, J. H., Schoorman, F. D., & Donaldson, L. (1997). Toward a Stewardship Theory of Management. Academy of Management Review, 22(1), 20-47.   DOI
28 Donaldson, L., & Davis, J. H. (1991). Stewardship Theory or Agency Theory: CEO Governance and Shareholder Returns. Australian Journal of Management, 16(1), 49-65.   DOI