Ownership Concentration, Corporate Governance and Firm Performance: Evidence from Pakistan
AbstractThe 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.
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Bibliographic InfoArticle provided by Pakistan Institute of Development Economics in its journal The Pakistan Development Review.
Volume (Year): 47 (2008)
Issue (Month): 4 ()
Ownership Concentration; Corporate Governance; Firm Performance; Panel Data;
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- G3 - Financial Economics - - Corporate Finance and Governance
- F3 - International Economics - - International Finance
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- Attiya Y. Javid & Robina Iqbal, 2010.
"Corporate Governance in Pakistan: Corporate Valuation, Ownership and Financing,"
2010:57, Pakistan Institute of Development Economics.
- Attiya Y. Javid & Robina Iqbal, 2010. "Corporate Governance in Pakistan : Corporate Valuation, Ownership and Financing," Governance Working Papers 22830, East Asian Bureau of Economic Research.
- Attiya Yasmin Javid & Qaisar Imad, 2012.
"A Decomposition Analysis of Capital Structure: Evidence from Pakistan’s Manufacturing Sector,"
Lahore Journal of Economics,
Department of Economics, The Lahore School of Economics, vol. 17(1), pages 1-31, Jan-June.
- Javed, Attiya Yasmin & Imad, Qaisar, 2012. "A decomposition analysis of capital structure: evidence from Pakistan’s manufacturing sector," MPRA Paper 39371, University Library of Munich, Germany.
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