Changes to the ownership and control of East Asian corporations between 1996 and 2008: The primacy of politics

Carney, Richard W.; Child, Travers Barclay

doi:10.1016/j.jfineco.2012.08.013

Cited by 203 publications

(154 citation statements)

References 16 publications

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“…However, there is growing empirical evidence that individual investors possess valuable private information and engage in informed trading (Kelley and Tetlock, 2013;Fong et al, 2014a;Tian et al, 2015). This possibility of individuals having private information cannot be ruled out in the context of Malaysia, given the prevalence of ownership concentration in the hands of family (see Carney and Child, 2013). If this possibility is valid, then the large shareholdings of individuals will reduce the number of outstanding shares available to other investors, and thus lower the degree of competition among traders.…”

Section: Estimation Results and Discussionmentioning

confidence: 99%

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Corporate Shareholdings and the Liquidity of Malaysian Stocks: Investor Heterogeneity, Trading Account Types and the Underlying Channels

2015

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Abstract:This paper examines the relationship between shareholdings of various investor groups and stock liquidity for Malaysian public listed firms over the [2002][2003][2004][2005][2006][2007][2008][2009] sample period. Using the Amihud illiquidity ratio, we extend the literature by addressing the issues of investor heterogeneity, trading account types and the interactions of competing liquidity channels. The analysis reveals that only local institutions and local individual investors who trade through the direct accounts are significantly associated with the liquidity of domestic firms. In contrast, the significant liquidity effect for foreign investors operates through the nominee accounts. While institutional ownership exhibits a linear negative relationship, our findings on local individuals and foreign nominees differ greatly from previous studies in that their relationship with stock liquidity is non-monotonic. Apart from the widely researched information asymmetry and trading effects, we find that liquidity is also driven by the largely ignored information competition channel. An important insight from our findings is that the large shareholdings by any particular investor group is detrimental to stock liquidity as they exacerbate information asymmetry, reduce the degree of competition and lower the level of trading activity.JEL Classifications: G12; G32

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Section: Estimation Results and Discussionmentioning

confidence: 99%

“…On one hand, individual investors increase the level of information asymmetry and lower the degree of competition, possibly due to the concentration of ownership in the hands of family (see Carney and Child, 2013). On the contrasting end, the active trading activity of individual investors improves the liquidity of Malaysian stocks.…”

Section: Introductionmentioning

confidence: 99%

Corporate Shareholdings and the Liquidity of Malaysian Stocks: Investor Heterogeneity, Trading Account Types and the Underlying Channels

2015

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“…Keenan and Aggestam (2001) explain that the attitudes and skills of major shareholders are the keys for firm's management, including for utilizing the IC. Claessens et al (2000), and Carney and Child (2013) find that the ownership concentration for the firms in East Asia, including in the ASEAN, is mostly concentrated in family ownership.…”

Section: Introductionmentioning

confidence: 96%

Family ownership and Entrenchment Effect on Intellectual Capital Utilization: Study on High-Technology Companies in Indonesia in Facing Asean Economic Community (AEC) ,

Pratama

Wibowo

2017

JAI

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At the end of 2015, the Association of Southeast Asian Nations (ASEAN) brought into being the ASEAN Economic Community (AEC). Due to the AEC, the firms in ASEAN should utilize their resources more effectively and efficiently, so that the firms can survive and grow despite strong competition in the AEC. Indonesia, as the country with the largest economy in the region, needs to address this issue so that companies in Indonesia can face the challenges resulting from the AEC. This study aimed to examine the positive relationship between the intellectual capital (IC) and the financial performance of high-technology (high-tech) companies that are listed on the Indonesia Stock Exchange, and also to examine whether the entrenchment effect of family ownership exists. This study was conducted from 2008 to 2014. The final sample used in this study consisted of 31 companies with a total of 144 observations. This study used a panel data regression model analysis. The results showed that, for a company, IC has a positive impact on financial performance. This result indicated that the efficient and effective use of their IC will help the firms to achieve higher financial performance, and will be useful for dealing with the AEC. There was no evidence that the entrenchment effect exists in the family ownership of high-tech companies in Indonesia and hampers the utilization of IC.

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“…This turmoil has been frequently documented to be attributed by a very poor corporate governance system [3]. The need for a more strategic and effective corporate governance becomes vital over the years, and ownership structure is one of the crucial mechanisms that need to be scrutinized and studied.…”

Section: Introductionmentioning

confidence: 99%

“…By using a set of recent data from the year 2000-2014 extracted from the Datastream database and annual reports over 402 firms with the employment of the Generalized Method of Moment (GMM) technique, this study seeks to examine the impact of familyowned structure plus firm-level determinants on the financing decision of the Indonesian firms. Like her other regional neighbors, Indonesia's capital market is featured by higher ownership concentration and family control [3,4], weaker legal system and investor protection, and weaker disclosure requirements [8] and thus offers a unique case for this study to examine the impact of concentrated ownership on the financing decisions of the firms. Besides that this study also looks at the influence of the commonly cited firm-level determinants on the financing choices of firms in Indonesia.…”

Section: Introductionmentioning

confidence: 99%

Ownership and Debt Financing: Indonesia Evidence

Haron¹

2018

Financial Management From an Emerging Market Perspective

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This study examines whether ownership concentration influences debt financing of firms in Indonesia. Known to be dominated by family owned, firms in Indonesia seem to have certain distinctive characteristics that are evidenced to have significant impact on their debt financing. Apart from the common firm-level determinants, ownership concentration does play an important role in determining the level of debt consumption of the firms. It is revealed that ownership concentration impacts the debt financing positively, reflecting the power and authority of the large controlling shareholders in using debt as controlling mechanism on the entrenched managers. The positive relationship may also be explained by the reluctance of large shareholders to engage with equity financing as to avoid ownership dilution and thus can maintain the control of the firms. In terms of ownership identity, however, family firms in Indonesia seem to consume much lesser debt level due to the alignment of interest between shareholders and managers, which makes issuing debts as manager's disciplinary tool less crucial for family-owned firms. This study contributes to the literature by offering insights on how ownership concentration and family-owned firms decide on their capital structure and how certain distinctive characteristics of the firms influence the financing decision.

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Changes to the ownership and control of East Asian corporations between 1996 and 2008: The primacy of politics

Cited by 203 publications

References 16 publications

Corporate Shareholdings and the Liquidity of Malaysian Stocks: Investor Heterogeneity, Trading Account Types and the Underlying Channels

Corporate Shareholdings and the Liquidity of Malaysian Stocks: Investor Heterogeneity, Trading Account Types and the Underlying Channels

Family ownership and Entrenchment Effect on Intellectual Capital Utilization: Study on High-Technology Companies in Indonesia in Facing Asean Economic Community (AEC) ,

Ownership and Debt Financing: Indonesia Evidence

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