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Ownership-based Incentives, Internal Corporate Risk and Firm Performance

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  • Anuchitworawong, Chaiyasit

Abstract

This study focuses on the incentives and risk-taking behavior of large shareholders in Thailand before and after the 1997 financial crisis. The results show that there is a negative association between risk and firm performance. However, the effect ore cash flow re members of top management. Furthermore, there is weak evidence that a move to more transparent direct control structure benefits the firms. Overall, the results indicate that ownership-based incentives are an effective means of aligning the interests between controlling shareholders and minority shareholders particularly in the post-crisis period.

Suggested Citation

  • Anuchitworawong, Chaiyasit, 2004. "Ownership-based Incentives, Internal Corporate Risk and Firm Performance," CEI Working Paper Series 2004-17, Center for Economic Institutions, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hitcei:2004-17
    Note: May 2004
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    File URL: https://hermes-ir.lib.hit-u.ac.jp/hermes/ir/re/13931/wp2004-17a.pdf
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    References listed on IDEAS

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    1. Erik Lehmann & Jürgen Weigand, 2000. "Does the Governed Corporation Perform Better? Governance Structures and Corporate Performance in Germany," Review of Finance, European Finance Association, vol. 4(2), pages 157-195.
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    Cited by:

    1. Kun Tracy Wang & Greg Shailer, 2018. "Does Ownership Identity Matter? A Meta‐analysis of Research on Firm Financial Performance in Relation to Government versus Private Ownership," Abacus, Accounting Foundation, University of Sydney, vol. 54(1), pages 1-35, March.
    2. 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.
    3. Chaiyasit Anuchitworawong, 2010. "The Value of Principles-Based Governance Practices and the Attenuation of Information Asymmetry," Asia-Pacific Financial Markets, Springer;Japanese Association of Financial Economics and Engineering, vol. 17(2), pages 171-207, June.
    4. 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.

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    More about this item

    Keywords

    Cash flow rights; Incentives; Financial and business risk; Thailand;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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