• The Journal of Asian Finance, Economics and Business
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• v.7 no.12
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• pp.293-308
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• 2020

This study aims to investigate the direct relationship between ownership structure, earnings manipulation, and organizational performance, and then examine the mediating effect of earnings manipulation in the relationship between ownership structure and organizational performance. This study collected and analyzed secondary data published in financial reports related to all insurance organizations listed in the Jordanian market during the study period (from 2009 until 2018). A panel data analysis was conducted, giving a total of 200 observations. The findings of this study concluded that ownership concentration, foreign ownership, and organization size affect organizational performance proxied by ROA, ROE, and EPS, more specifically, ownership concentration and organization size have a positive effect, whereas foreign ownership has a negative effect. At the same time, board of director ownership, organizational ownership, and CEO compensation did not affect organizational performance. Next, the board of director ownership, ownership concentration, foreign ownership, and CEO compensation affect earnings manipulation separately. In addition, earnings manipulation positively affects organizational performance proxied by ROA, ROE and EPS. This means that the higher the earnings manipulation is, the higher the organizational performance is. Finally, earnings manipulation mediates the relationship between ownership concentration and foreign ownership of ownership structure, and organizational performance.

• Asian Journal of Business Environment
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• v.12 no.4
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• pp.35-44
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• 2022

Purpose: The main purpose of this study is to find out the impact of ownership structure on firm performance in the pharmaceutical and chemical industry of Bangladesh. Research design, data and methodology: The study has been conducted on 28 listed pharmaceutical and chemical companies from 2012 to 2020. Return on Assets (ROA) and Tobin's Q are selected as indicators of internal and market performance of the firms respectively whereas institutional ownership, directors' ownership and foreign ownership are selected as proxies of ownership structure. Panel analysis using random effects, lag method and time dummy method is used to analyse the relationship. Results: The study has found the existence of highly concentrated directors' ownership, a low percentage of institutional ownership and a very insignificant proportion of foreign ownership in the industry. The regression results show that directors' ownership has a positive and significant impact on firm performance, supporting the concept of agency theory. The study has also found a positive and significant impact of foreign ownership on firm performance. Unfortunately, the impact of institutional ownership is found to be insignificant. Conclusions: Directors' ownership and foreign ownership decreases agency cost that ultimately increases firm performance. However, the role of institutional investors is not significant enough to improve firm performance. It is suggested that institutional investors should be more active and involved in monitoring the activities of the organisations to improve performance.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.11
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• pp.647-656
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• 2020

This study empirically examines the effect of ownership structure on bank diversification and risk-taking behavior. The population of this study is based on all commercial banks listed in Bangladesh. Thirty-two conventional commercial banks were randomly selected from thirty-three conventional banks for this study. Data was collected from the annual reports of the concerned banks from 2000 to 2017. To analyze the data, we had applied the two-stage least squares (2SLS) estimator. The results of the analysis show that ownership structure i.e. managerial ownership, institutional ownership, general public ownership, and ownership concentration have a significant negative impact on bank diversification. On the other hand, institutional ownership, managerial ownership, and general public ownership have a significant positive impact on Z-score, and ownership concentration has an insignificant but positive impact on the Z-score of banks in Bangladesh. Therefore, the study opposes the benefits of diversification and promotes ownership structure which is capable of ensuring better financial stability by reducing the probability of risk. The policy-makers especially, Bangladesh banks should evaluate the fact of this study to issue guidelines on corporate governance, bank diversification, and risk-taking behavior of commercial banks.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.7
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• pp.323-331
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• 2021

This paper examines the relationship between ownership structure and level cash holdings in an emerging country, namely, Saudi Arabia, by constructing a corporate governance mechanism (foreign ownership, family ownership, institutional and managerial ownership). This paper uses data from 100 listed firms at Saudi Stock Exchange (TADAWUL) from 2011 to 2019. The firm's decision to hold cash has come to the fore in the last two or three years as a result of the recent global financial crisis, and the impact that this has had on the firms' ability to raise funds from external sources. Using the random-effect generalized least square (GLS) regression model, the findings reveal that foreign and family ownership negatively influences cash holdings, while managerial ownership has a positive association with cash holdings. Further, institutional ownership did not have a direct effect on cash holdings in Saudi Arabia. Our results suggest that ownership structure include foreign ownership, family and managerial ownership is an essential vehicle to promote the performance of cash holding of all the 100 public-listed non-financial firms in Saudi Arabia. We recommend that sound policies should be targeted toward foreign ownership, family, and managerial ownership since they are essential to improve cash holding in Saudi Arabian firms.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.7
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• pp.423-431
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• 2021

This research (1) examines the effect of stock ownership structure on capital structure; (2) explains the effect of stock ownership structure on corporate value; and (3) investigates the influence of capital structure on corporate value. This research is categorized as a quantitative research, which is directed to test various theories. In this study, the population of all consumption companies listed on the Indonesia Stock Exchange (IDX) consist of 38 companies. Population data in this study are all consumption companies, which have gone public in the period from 2010 to 2015. In this study, given the objectives and problem formulation and hypothesis, the analysis method used is Generalized Structural Component Analysis (GSCA). Ownership structure has a significant effect on capital structure; ownership structure has no significant effect on corporate value; capital structure has a significant effect on corporate value; corporate value has a significant effect on capital structure. Previous research found different results. Some researchers found a positive relationship and other researchers found a negative relationship, and there are studies that found both significant and non-significant effects. The inconsistency of previous research results prompted the researchers to examine the effect of ownership structure on capital structure and corporate value.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.9
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• pp.159-168
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• 2020

This is a quantitative research, underpinned by the philosophy of natural science and deduction approach that examines the impact of the various aspects of corporate governance mechanism on the choice of capital structure of Vietnamese listed firms. We focus on the effect of factors such as the board size, the board independence, and especially different ownership structures, which include the managerial ownership, the state ownership, the concentrated ownership, and the foreign ownership. They are the main scopes of corporate governance and are supposed to be relevant to determine the corporate financing choice. To explain the causal relationship between factors, we construct the regression model and then test it by using different statistical method approaches, including the pooled OLS, the fixed effects model, and the random effects model. Data are collected from 336 firms with shares listed in the Ho Chi Minh City Stock Exchange in Vietnam, totaling 1583 observations. Overall, the results reveal that the board size, state ownership, and concentrated ownership have positive impact on the firm's capital structure, whereas foreign ownership appears to have negative influence on the capital structure. The research does not find evidence of a the correlation between board independence, managerial ownership and corporate capital struture.

• The Journal of Asian Finance, Economics and Business
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• v.7 no.11
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• pp.107-115
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• 2020

This study is concerned with the relationship between firm's ownership structure and the co-movement of the stock return with the market return. Four different types of firm ownership, including managerial ownership, state ownership, foreign ownership, and concentrated ownership, are among the main features of the company's governance mechanism and have been separately documemented in the previous research to understand their impact on stock price synchronicity. We constructed the regression model, using stock price synchronicity as the dependent variable and the above four components of ownership structure as explanantory variables. The pooled OLS, the fixed effects model, and the random effects are employed to investigate the outcome of the study. Data used in the reserch are of public firms listed on the Ho Chi Minh City Stock Exchange (HOSE) during the five-year period term from 2015 to 2019. The data sample contains 235 companies from 10 industries with 1135 observations. The results revealed by the fixed effects model, the large ownership and the managerial ownership are found to have adverse effect on the stock price synchronicity, whereas the foreign ownership model is revealed to have positive influence on the stock return co-movement. The effect of the state ownership on the stock price synchronicity is not confirmed.

• The Journal of Asian Finance, Economics and Business
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• v.6 no.3
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• pp.67-79
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• 2019

This study examines the impact of corporate governance on capital structure decisions based on a large panel of Chinese listed firms. Using the system Generalized Method of Moments (GMM) estimator to control for unobserved heterogeneity, endogeneity, and persistency in capital structure decisions, we document that the ownership structure plays a significant role in determining leverage ratios. More specially, we find that managerial ownership has a positive and significant impact on firms' leverage, consistent with the incentive alignment hypothesis. We also find that managerial ownership only affects the leverage decisions of private firms in the post-2005 split share reform period. State ownership negatively influence leverage decisions implying that SOEs may face fewer restrictions in equity issuance and may receive favourable treatments when applying for seasoned equity ¿nancing, thus use less debt. Furthermore, our results show that while foreign ownership negatively influences leverage decisions, legal person shareholding positively influences firms' leverage decisions only for state controlled firms. We also find that the board structure variables (board size and the proportion of independent directors) do not influence firms' capital structure decisions. Our findings suggest that recent ownership reforms have been successful in terms of providing incentive to managers through managerial shareholdings to take risky financial choices.

• The Journal of Asian Finance, Economics and Business
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• v.8 no.4
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• pp.317-328
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• 2021

This study aims to determine the factors that affect dividends initiation by initial public offering firms in Malaysia. The ownership structure is examined from a corporate governance theoretical perspective in order to evaluate the impacts of managerial, institutional, and family ownership on the dividend's initiation decision of IPO firms. This study employs a quantitative pooled cross-section of 372 Malaysian IPO companies active during the period of 2002-2013. The number of firms that went public each year varies, thus the pooled cross-section data takes place in this case rather than the panel data. The logistic model was employed to test the proposed hypotheses. The results revealed that the presence of institutional investors in the ownership structure make it more likely for IPO firms to initiate dividends. On the contrary, the presence of a family ownership structure in IPO companies as the controlling shareholder makes these companies less probable to initiate dividends. Managerial ownership was found to have no effect on the decision of initiating dividends by IPO firms. The findings of this study suggest that the existence of institutional and family ownerships are agency cost mitigators, as these ownership types could prompt IPOs firms to initiate dividends to overcome the agency conflicts.

• The Korean Journal of Financial Management
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• v.25 no.3
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• pp.155-173
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• 2008

Controlling for the impacts of main strands of debt maturity theories, we highlight the relationship between syndicated loan maturity and ownership structure of Korean borrowers. We find that as the ownership of large shareholders increases, the maturity of syndicated loans also increases. Additionally, we identify a negative relation between foreigners' ownership and loan maturity, indicating that foreign institutional investors serve valuable monitoring functions; as their equity shares increase, they fully take advantage of frequent renewals through the short maturity of syndicated loan. We also show that the predicted value of leverage is more systematically and positively related to the maturity of syndicated loan.