Ownership Concentration, Corporate Governance and Firm Performance: Evidence from Pakistan
By A. Y. Javid, Robina Iqbal. 2008
155 citations recorded by the source corpus.
The study investigates the determinants of ownership concentration, the effect of ownership concentration on the firm’s performance with the sample of sixty representativ e firms from different manufacturing sectors of the Pakistan’s economy during 2003 to 2008. The results suggest that firms where ownership is concentrated they do not adopt better governance practices and disclose less, however board composition has posit ive and significant role. The firm specific factors affect the concentration of ownership more, the more investment opportunities provides greater incentives for ownership concentration, however, size has opposite effect and leads to diverse ownership to get wider access to funds and share ownership. The results reveal that in Pakistan corporations have more concentration of ownership which is the response of weak legal environment. The concentration of ownership by top five block-holders seems to have positive effect on firms’ profitability and performance measures. The family, foreign and director ownership also has positive affect on firm performance, however firm performance is not effected by financial institutions’ ownership. The broad implication that emerges from this study is that ownership concentration is an endogenous response of poor legal protection of the investors and seems to have significant effect on firm performance. It requires implementation of corporate governance reforms at most at par with real sector and financial sector reforms.
Subfields: Accounting, Finance
View Paper: https://www.semanticscholar.org/paper/c3e677b9c3265323c3a95cbb86b207ea2d543cb8
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Citations in the corpus
- The mediating role of innovation between corporate governance and organizational performance: Moderating role of innovative culture in Pakistan textile sector (2019, background): “Corporate governance was commenced in Pakistan by Security and Exchange Commission of Pakistan (SECP) in the 2002 and researchers conclude that very limited literature contribution in the corporate governance mechanism (Javid & Iqbal, 2008).”
- An Analysis of Corporate Social Responsibility and Firm Performance with Moderating Effects of CEO Power and Ownership Structure: A Case Study of the Manufacturing Sector of Pakistan (2019, background): “In a developing country such as Pakistan, it is supposed that the CEO is more powerful than the board of directors because this key post is mainly held by family members [111,112].”
- Firm performance, corporate governance and executive compensation in Pakistan (2018, background): “In Pakistani context, CEOs tend to be more powerful than the boards because they are either heads of the controlling families or have strong ties with controlling shareholders (Javid and Iqbal 2008; Kamran and Shah 2014).”
- Corporate Governance and Tobin’s Q as a Measure of Organizational Performance (2018, unknown): “The main governance issue in Pakistan arises from the risk of expropriation by firms’ dominant or controlling shareholders at the expense of minority shareholders (Javid and Iqbal, 2008).”