Board independence, ownership concentration and corporate performance—Chinese evidence

Li, Ke; Lü, Lei; Mittoo, Usha R.; Zhang, Zhou

doi:10.1016/j.irfa.2015.05.024

Cited by 102 publications

(87 citation statements)

References 68 publications

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“…Contrary research results are found in Li, Lu, Mittoo and Zhang (2015), who point out that a lower level of ownership concentration, at the same time, means a greater independence of corporate management and a higher level of corporate performance. Such results can be explained by a higher degree of development of corporate sector in terms of a whole as a corporate culture that prevails in economy, which was the subject of this research.…”

Section: Theoretical Basis Of the Paperconcentration Of Ownership As contrasting

confidence: 68%

Ownership structure as a measure of corporate performance

Marić

Uzelac²,

Jelača³

2019

Strategic Management

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Economic transition is not a one-dimensional process but implies ownership, structural and management transformation. We can call the current circumstances of the economy of the Republic of Serbia posttransitional, for which the ownership transformation is largely due. The aforementioned process is the basis for the formation of a corporate sector in which all the most important determinants of professional management are expressed, since the capital market represents the greatest distance between ownership and management. The structure of corporate ownership determines the nature of the relationship between managers and shareholders, which in the final instance manifests in the form of principal -principal or principal -agent of the situation. The paper will analyse the nature of the ownership structure of corporations, according to one of the usual three dimensions (concentration of ownership), in relation to the corporate performance. The corporate performance will be expressed using the Tobin's Q indicators. The structure of ownership of the corporation will be presented using two sets of indicators. The first group consists of indicators of percentage participation of a number of major shareholders in the form of Top_1, Top_2, Top_3 and Top_5. Another approach to property ownership analysis includes G1 (widely held) indicators that represent dispersed -owned corporations, G2 corporations with large shareholders, and G3 (ultimate owner) majority-owned corporations. In the random sample will be selected corporations that have a listing on the Belgrade Stock Exchange, while at the level of parametric statistical procedures, methods will be used for analysingthe correlation between the listed variables and identifying the differences between the groups formed on the basis of the above mentioned criterion. The main objective of the paper is to define the ownership structure of a corporation that has direct implications for the management and performance of corporations. Corporate performance expressed through market capitalization determines the future of operations through the scope of future investments.

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Section: Theoretical Basis Of the Paperconcentration Of Ownership As contrasting

confidence: 68%

Ownership structure as a measure of corporate performance

Marić

Uzelac²,

Jelača³

2019

Strategic Management

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“…Controlling shareholders can use ownership concentration to monitor management and enhance firm value [43]. They are capable of confining managers' power in case of managers pursuing personal interests rather than the interests of shareholders.…”

Section: Hypothesis 2 (H2)mentioning

confidence: 99%

The Impacts of Social Responsibility and Ownership Structure on Sustainable Financial Development of China’s Energy Industry

Chen

Tang³

2018

Sustainability

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Abstract:In the analysis, we integrated stakeholder and agency theories to explore the connection between corporate social responsibility (CSR) and sustainable financial development by considering the moderating effect of ownership structure. After empirical analysis, we found the following conclusions. First, the short-term and long-term economic performance is positively affected by CSR, which leads to sustainable financial development. Second, ownership circulation has a positive relationship with economic performance in the short run, which short-term profit increases as ownership circulation strengthens. Third, the effect of CSR on short-term economic performance is moderated by ownership structure. Excessive concentrated ownership may lead to decisions that do not satisfy all key stakeholders and may reduce the positive effect of CSR on economic performance. Finally, we suggest that Chinese energy companies should pay more attention to improving corporate social responsibility to maintain good economic performance and develop sustainable competitive advantage. Meanwhile, companies should optimize ownership concentration to avoid weakening the positive effects of social responsibility on short-term economic performance.

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“…Researchers such as Laeven and Levine (2008) and Pagano and Roell (1998) argue that ownership structure comprising shareholders with large stakes in the company can benefit minority shareholders by improving monitoring over managers. However, Casado, Burkert, Davila and Oyon (2016), Li, Lu, Mittoo and Zhang (2015), and Shleifer and Vishny (1997) note that large shareholders can also be harmful and create principal-principal conflicts (i.e. goal incongruence among shareholder groups in a firm, particularly between the controlling and minority shareholders).…”

Section: Introductionmentioning

confidence: 99%

Multiple Large Shareholders, Excess Leverage and Tunneling: Evidence from an Emerging Market

Boateng

Huang

2016

Corporate Governance

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Manuscript Type: EmpiricalResearch Question/Issue: Past empirical efforts in corporate governance have examined the effects of large shareholders with excess control rights on tunneling activities. However, no study has systematically investigated the effects of multiple large shareholders on excess leverage policies and tunneling in an emerging country environment where minority rights protection is weak. In this study, we examine the role of multiple large shareholders and the effects of control contestability of multiple large shareholders on firm excess leverage decision and tunneling by controlling shareholders. Research Findings/Insights: Using a sample of 2,341 Chinese firms for the years 2001 to 2013, we document that the contestability of multiple non-controlling large shareholders relative to controlling shareholders reduces the adoption of excess leverage policies, tunneling and enhances capital investment. Another intriguing finding is that the government, as a controlling shareholder, exerts significant influence and reduces the monitoring effectiveness of multiple larger shareholders. Theoretical/Academic Implications: By addressing the role of multiple large shareholders on excess leverage decisions, this study makes an important contribution to the corporate governance literature. We extend the recent developments in agency theory regarding the role of multiple large shareholders in constraining expropriation of controlling shareholders with excess control rights and their effect on firm leverage decisions. Our results support the theoretical models which indicate that the presence of multiple large shareholders is an important and efficient internal governance mechanism that mitigates a firm's agency costs, particularly, in an emerging market environment where corporate governance is weak and inadequate to curb the tunneling problem.

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Board independence, ownership concentration and corporate performance—Chinese evidence

Cited by 102 publications

References 68 publications

Ownership structure as a measure of corporate performance

Ownership structure as a measure of corporate performance

The Impacts of Social Responsibility and Ownership Structure on Sustainable Financial Development of China’s Energy Industry

Multiple Large Shareholders, Excess Leverage and Tunneling: Evidence from an Emerging Market

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