IDEAS home Printed from https://ideas.repec.org/a/aad/iseicj/v4y2016i0p214-222.html
   My bibliography  Save this article

The Effects Of Ownership Concentration On Performance Of Pakistani Listed Companies

Author

Listed:
  • Nouman Afgan

    (Department of Quantitative Economics, Vienna University of Economics and Business, Vienna)

  • Klaus Gugler

    (Department of Quantitative Economics, Vienna University of Economics and Business, Vienna)

  • Robert Kunst

    (Department of Economics, University of Vienna)

Abstract

This paper analyzes the effects of ownership concentration on investment performance in a large sample of Pakistani publicly-listed companies from 1997 to 2007. Special attention is directed to statistical methods from the field of panel-data econometrics, which are able to deal with endogeneity problems and with structural reverse causality. The preferred estimator that is based on firm fixed effects insinuates that the voting rights of ultimate shareholders affect Tobin’s q unambiguously negatively, whereas the squared voting rights affect it unambiguously positively. This implies a U-curved relationship between Tobin’s q and voting rights concentration with a turning point at 45%. More than 75% of the companies fall in the upward sloping part of the curve. While positive incentive effects are at work in Pakistan, financial market development is retarded by the reluctance of minority shareholders facing dominant shareholders to hold small stakes in listed companies. Consistently, institutional shareholders do not yet provide a positive monitoring role in Pakistan.

Suggested Citation

  • Nouman Afgan & Klaus Gugler & Robert Kunst, 2016. "The Effects Of Ownership Concentration On Performance Of Pakistani Listed Companies," CBU International Conference Proceedings, ISE Research Institute, vol. 4(0), pages 214-222, September.
  • Handle: RePEc:aad:iseicj:v:4:y:2016:i:0:p:214-222
    DOI: 10.12955/cbup.v4.764
    as

    Download full text from publisher

    File URL: https://ojs.journals.cz/index.php/CBUIC/article/view/764/855
    Download Restriction: no

    File URL: https://libkey.io/10.12955/cbup.v4.764?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fiaz Ahmad Sulehri & Mohammad Ahmed & Amjad Ali, 2022. "Proprietorship Structure and Firm Performance in the Context of Tunneling: An Empirical Analysis of Non-Financial Firms in Pakistan," Journal of Policy Research (JPR), Research Foundation for Humanity (RFH), vol. 8(4), pages 115-124, December.

    More about this item

    Keywords

    corporate governanceultimate ownership; institutional shareholdings; endogeneity of ownership; and investment performance;
    All these keywords.

    JEL classification:

    • L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
    • G3 - Financial Economics - - Corporate Finance and Governance

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:aad:iseicj:v:4:y:2016:i:0:p:214-222. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Petr Hájek (email available below). General contact details of provider: https://ojs.journals.cz/index.php/CBUIC .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.