IDEAS home Printed from https://ideas.repec.org/a/pal/ijodag/v21y2024i3d10.1057_s41310-023-00204-5.html
   My bibliography  Save this article

Does ownership pattern affect firm performance? Empirical evidence from an emerging market

Author

Listed:
  • Sumon Kumar Das

    (Noakhali Science and Technology University)

  • Shafiqul Alam

    (Noakhali Science and Technology University)

  • Md. Jamsedul Islam

    (Noakhali Science and Technology University)

  • Fahmida Boby

    (Noakhali Science and Technology University)

  • Rabeya Begum

    (Noakhali Science and Technology University)

Abstract

This study examines the effect of stockholdings patterns on the corporate performance of a developing market like Bangladesh. The study investigated the top 50 listed firms on the Dhaka Stock Exchange (DSE) as market capitalization from 2015 to 2019, and data were analyzed using multiple regression. The findings showed that director and foreign stockholdings had a considerable positive effect on firm’s performance in both accounting and market measures. In contrast, institutional stockholdings exhibit a negative and insignificant association with all measures except Market to Book Value (MBR), which reflect a significant negative association. The outcomes of this study may contribute to the market regulators, government, and policymakers to emphasize the close monitoring of the compliance of existing rules by companies and focus on restructuring stockholdings patterns in formulating regulations and codes for better firm performance.

Suggested Citation

  • Sumon Kumar Das & Shafiqul Alam & Md. Jamsedul Islam & Fahmida Boby & Rabeya Begum, 2024. "Does ownership pattern affect firm performance? Empirical evidence from an emerging market," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 21(3), pages 406-420, September.
    • Handle: RePEc:pal:ijodag:v:21:y:2024:i:3:d:10.1057_s41310-023-00204-5
    DOI: 10.1057/s41310-023-00204-5
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1057/s41310-023-00204-5
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1057/s41310-023-00204-5?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Shleifer, Andrei & Vishny, Robert W, 1997. "A Survey of Corporate Governance," Journal of Finance, American Finance Association, vol. 52(2), pages 737-783, June.
    2. Mohamed Belkhir, 2009. "Board of directors' size and performance in the banking industry," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 5(2), pages 201-221, April.
    3. Andriosopoulos, Dimitris & Yang, Shuai, 2015. "The impact of institutional investors on mergers and acquisitions in the United Kingdom," Journal of Banking & Finance, Elsevier, vol. 50(C), pages 547-561.
    4. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
    5. Alex Edmans, 2009. "Blockholder Trading, Market Efficiency, and Managerial Myopia," Journal of Finance, American Finance Association, vol. 64(6), pages 2481-2513, December.
    6. Chiung-Ju Liang & Ying-Li Lin & Tzu-Tsang Huang, 2011. "Does Endogenously Determined Ownership Matter on Performance? Dynamic Evidence from the Emerging Taiwan Market," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 47(6), pages 120-133, November.
    7. Roberto Barontini & Lorenzo Caprio, 2006. "The Effect of Family Control on Firm Value and Performance: Evidence from Continental Europe," European Financial Management, European Financial Management Association, vol. 12(5), pages 689-723, November.
    8. Roszaini Haniffa & Mohammad Hudaib, 2006. "Corporate Governance Structure and Performance of Malaysian Listed Companies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(7-8), pages 1034-1062.
    9. Saha Rupjyoti & Kabra Kailash Chandra, 2019. "Does corporate governance influence firm performance? Evidence from India," Economics and Business Review, Sciendo, vol. 5(4), pages 70-89, December.
    10. Yabei Hu & Shigemi Izumida, 2008. "Ownership Concentration and Corporate Performance: A Causal Analysis with Japanese Panel Data," Corporate Governance: An International Review, Wiley Blackwell, vol. 16(4), pages 342-358, July.
    11. Sudipta Bose & Sarowar Hossain & Abdus Sobhan & Karen Handley, 2022. "Does female participation in strategic decision‐making roles matter for corporate social responsibility performance?," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(3), pages 4109-4156, September.
    12. Jonathan Farrer & Ian Ramsay, 1998. "Director Share Ownership and Corporate Performance – Evidence from Australia," Corporate Governance: An International Review, Wiley Blackwell, vol. 6(4), pages 233-248, October.
    13. Aziz Jaafar & Lynn Hodgkinson & Mao-Feng Kao, 2019. "Ownership Structure, Board of Directors and Firm Performance: Evidence from Taiwan," Working Papers 19011, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    14. René M. Stulz, 1999. "Golbalization, Corporate Finance, And The Cost Of Capital," Journal of Applied Corporate Finance, Morgan Stanley, vol. 12(3), pages 8-25, September.
    15. Roszaini Haniffa & Mohammad Hudaib, 2006. "Corporate Governance Structure and Performance of Malaysian Listed Companies," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 33(7‐8), pages 1034-1062, September.
    16. William S. Schulze & Michael H. Lubatkin & Richard N. Dino & Ann K. Buchholtz, 2001. "Agency Relationships in Family Firms: Theory and Evidence," Organization Science, INFORMS, vol. 12(2), pages 99-116, April.
    17. Boubakri, Narjess & El Ghoul, Sadok & Wang, He & Guedhami, Omrane & Kwok, Chuck C.Y., 2016. "Cross-listing and corporate social responsibility," Journal of Corporate Finance, Elsevier, vol. 41(C), pages 123-138.
    18. Benjamin E. Hermalin & Michael S. Weisbach, 2003. "Boards of directors as an endogenously determined institution: a survey of the economic literature," Economic Policy Review, Federal Reserve Bank of New York, vol. 9(Apr), pages 7-26.
    19. Black, Bernard S. & Kim, Woochan & Jang, Hasung & Park, Kyung-Suh, 2015. "How corporate governance affect firm value? Evidence on a self-dealing channel from a natural experiment in Korea," Journal of Banking & Finance, Elsevier, vol. 51(C), pages 131-150.
    20. Gillan, Stuart L., 2006. "Recent Developments in Corporate Governance: An Overview," Journal of Corporate Finance, Elsevier, vol. 12(3), pages 381-402, June.
    21. David, Parthiban & Kochhar, Rahul, 1996. "Barriers to effective corporate governance by institutional investors: Implications for theory and practice," European Management Journal, Elsevier, vol. 14(5), pages 457-466, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Naeem Tabassum & Satwinder Singh, 2020. "Corporate Governance and Organisational Performance," Springer Books, Springer, number 978-3-030-48527-6, January.
    2. Hussein Abedi Shamsabadi & Byung-Seong Min & Richard Chung, 2016. "Corporate governance and dividend strategy: lessons from Australia," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 12(5), pages 583-610, October.
    3. Aziz Jaafar & Lynn Hodgkinson & Mao-Feng Kao, 2019. "Ownership Structure, Board of Directors and Firm Performance: Evidence from Taiwan," Working Papers 19011, Bangor Business School, Prifysgol Bangor University (Cymru / Wales).
    4. Hania Rehman & Muhammad Ramzan & Muhammad Zia Ul Haq & Jinsoo Hwang & Kyoung-Bae Kim, 2021. "Risk Management in Corporate Governance Framework," Sustainability, MDPI, vol. 13(9), pages 1-17, April.
    5. Nguyen, Tuan & Locke, Stuart & Reddy, Krishna, 2014. "A dynamic estimation of governance structures and financial performance for Singaporean companies," Economic Modelling, Elsevier, vol. 40(C), pages 1-11.
    6. Wan-Hussin, Wan Nordin, 2009. "The impact of family-firm structure and board composition on corporate transparency: Evidence based on segment disclosures in Malaysia," The International Journal of Accounting, Elsevier, vol. 44(4), pages 313-333, December.
    7. Muniandy, Balachandran & Hillier, John, 2015. "Board independence, investment opportunity set and performance of South African firms," Pacific-Basin Finance Journal, Elsevier, vol. 35(PA), pages 108-124.
    8. Nguyen, Tuan & Locke, Stuart & Reddy, Krishna, 2015. "Ownership concentration and corporate performance from a dynamic perspective: Does national governance quality matter?," International Review of Financial Analysis, Elsevier, vol. 41(C), pages 148-161.
    9. Fidanoski, Filip & Mateska, Vesna & Simeonovski, Kiril, 2013. "Corporate Governance and Bank Performance: Evidence from Macedonia," MPRA Paper 46773, University Library of Munich, Germany, revised Mar 2013.
    10. Emmanuel Chuke Nwude & Musa Sani Zakirai & Comfort Amaka Nwude, 2023. "Ownership Structure and Bank Performance in Emerging Market Economy: Evidence From Nigerian Listed Deposit Money Banks," SAGE Open, , vol. 13(4), pages 21582440231, December.
    11. Kun Wang & Greg Shailer, 2015. "Ownership Concentration And Firm Performance In Emerging Markets: A Meta-Analysis," Journal of Economic Surveys, Wiley Blackwell, vol. 29(2), pages 199-229, April.
    12. Paolo Roffia & Virginia Simón-Moya & Javier Sendra García, 2022. "Board of director attributes: effects on financial performance in SMEs," International Entrepreneurship and Management Journal, Springer, vol. 18(3), pages 1141-1172, September.
    13. Wang, Kun Tracy & Shailer, Greg, 2017. "Family ownership and financial performance relations in emerging markets," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 82-98.
    14. Ahmad Yuosef Alodat & Zalailah Salleh & Hafiza Aishah Hashim & Farizah Sulong, 2021. "Corporate governance and firm performance: empirical evidence from Jordan," Journal of Financial Reporting and Accounting, Emerald Group Publishing Limited, vol. 20(5), pages 866-896, August.
    15. Martin Kyere & Marcel Ausloos, 2021. "Corporate governance and firms financial performance in the United Kingdom," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(2), pages 1871-1885, April.
    16. Saha Rupjyoti & Kabra Kailash Chandra, 2019. "Does corporate governance influence firm performance? Evidence from India," Economics and Business Review, Sciendo, vol. 5(4), pages 70-89, December.
    17. Pursey Heugens & Marc Essen & J. Oosterhout, 2009. "Meta-analyzing ownership concentration and firm performance in Asia: Towards a more fine-grained understanding," Asia Pacific Journal of Management, Springer, vol. 26(3), pages 481-512, September.
    18. Barontini, Roberto & Bozzi, Stefano, 2018. "Family firm heterogeneity and CEO compensation in Continental Europe," Journal of Economics and Business, Elsevier, vol. 97(C), pages 1-18.
    19. Helmi A. Boshnak, 2024. "Ownership concentration, managerial ownership, and firm performance in Saudi listed firms," International Journal of Disclosure and Governance, Palgrave Macmillan, vol. 21(3), pages 462-475, September.
    20. Md. Harun Ur Rashid & Shah Asadullah Mohd. Zobair & Md. Asad Iqbal Chowdhury & Azharul Islam, 2020. "Corporate governance and banks’ productivity: evidence from the banking industry in Bangladesh," Business Research, Springer;German Academic Association for Business Research, vol. 13(2), pages 615-637, July.

    More about this item

    Keywords

    Corporate governance; Dhaka stock exchange (DSE); Director stockholdings; Firm performance; Foreign stockholdings; Institutional stockholdings;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

    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:pal:ijodag:v:21:y:2024:i:3:d:10.1057_s41310-023-00204-5. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.palgrave.com .

    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.