Corporate governance and investment in East Asian firms—empirical analysis of family-controlled firms

Hanazaki, Masaharu; Liu, Qun

doi:10.1016/j.asieco.2006.12.003

Cited by 41 publications

(42 citation statements)

References 19 publications

(17 reference statements)

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“…The results show that the investment is more strongly related to cash flow in family-controlled firms than in firms that are not family-controlled. This is consistent with the results of Hanazaki and Liu (2007) as well as those of Gugler et al (2007), who studied samples of East Asian firms (Indonesia, Korea, Malaysia, Philippines and Thailand) and Continental European firms, respectively, to find that familycontrolled firms appeared to be more financially constrained.…”

Section: Discussionsupporting

confidence: 91%

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The effect of family control on investment-cash flow sensitivity

Hung

Kuo

2011

Applied Financial Economics

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This article examines the effect of family control on investment-cash flow sensitivity and distinguishes the effect between agency problems and asymmetric information. Using an unbalanced panel data of 1206 Taiwanese firms for the time period 1999 to 2008, we find that family control increases the investment-cash flow sensitivity. In family controlled firms, compared with in firms that are not family controlled, investment is more sensitive to cash flow, which is related to asymmetric information problems.

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Section: Discussionsupporting

confidence: 91%

“…SIZE is calculated by the natural log of total assets. Tables 2 and 3 are positive, supporting the monitoring function of debt proposed by Hanazaki and Liu's (2007). The coefficients of SIZE are most significantly positive, indicating that larger firms are more aggressive in investment.…”

Section: Resultssupporting

confidence: 65%

The effect of family control on investment-cash flow sensitivity

Hung

Kuo

2011

Applied Financial Economics

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“…Chrisman et al (2002) show that it is possible to differentiate family firms from non-family firms on the basis of ownership, management, and intention for family succession without the use of arbitrary cut-off points. Studies using dataset from Asian countries consider a firm as a family-controlled when the controlling shareholder is a family member (Hanazaki and Liu 2007;Claessens et al 2000) or shares are held by founding family (Saito 2008). Using data from Finish market, for instance, Maury and Pajuste (2005) measure family ownership by aggregating families according to their family surnames.…”

Section: Control Variablesmentioning

confidence: 99%

Board attributes and foreign shareholdings in Malaysian listed firms

2014

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This study examines the association between foreign shareholdings and several characteristics of board of directors in the context of a developing capital market. Using data of 777 listed firms on Bursa Malaysia for the financial year 2008, the study predicts that foreign shareholdings are positively related to board independence, multiple directorships, and financial literacy of the board of directors. The study finds a strong positive relationship between multiple directorships and foreign shareholdings. Contrary to our expectation, the association between board financial literacy and foreign shareholdings is negative and significant. With regard to the link between board independence and foreign shareholdings, we find weak evidence to support our prediction that there is positive relationship between board independence and foreign shareholdings. The multivariate results also show strong positive relationships between foreign shareholdings and number of foreign directors on boards, and between foreign shareholdings and audit quality. The study also documents a significant negative association between foreign shareholdings and firm size, and between foreign shareholdings and book-to-market ratio. The findings of the study supports the view that multiple directorships is an important asset to firms in emerging markets partly due to limited pool of potential talents and experts

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“…On average, this literature shows that stock price positively impacts firms' investment levels. Some of these papers include Aivazian et al (2005), Hanazaki and Liu (2007), Yuan and Motohashi (2008), Bokpin and Onumah (2009), Umutlu (2010), Ma'in and Ismail (2011), Geng and N'Diaye (2012, and Wang et al (2013).…”

Section: The Issue Of Stock Market Liquidity: Literature Reviewmentioning

confidence: 99%

The 2008 Global Financial Crisis: The Case of a Market with Consistent Losses Ever Since

Yaseen¹,

Omet²,

Abdel-Halim³

2015

EJBM

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Following the 2008 global financial crisis, and in common with many stock markets around the world, the Amman Securities Exchange (ASE) experienced some heavy losses. However, what makes the Jordanian market probably different is its inability to recover. The weighted price index fell from 7519.3 points in 2007 to 5520.1 points in 2009, to 4593.9 points in 2012, and to 4336.7 points by the end of 2013 respectively. With a statutory minimum tick which is equal to one pence, this observation has some serious implications to the liquidity cost that prevails in the Jordanian capital market, and the cost of financing listed firms. The primary aim of this research paper is to examine the impact of the stock market crash in Jordan on liquidity cost. Based on a total number of 108 listed stocks and daily data during the years 2007 and 2009, the empirical results indicate that liquidity cost on the Jordanian capital market is high. In addition, the results show that the 2009 stock market crash has led to a substantial increase in liquidity cost. In other words, the market must consider a number of remedial measures to improve its' operational efficiency.

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Corporate governance and investment in East Asian firms—empirical analysis of family-controlled firms

Cited by 41 publications

References 19 publications

The effect of family control on investment-cash flow sensitivity

The effect of family control on investment-cash flow sensitivity

Board attributes and foreign shareholdings in Malaysian listed firms

The 2008 Global Financial Crisis: The Case of a Market with Consistent Losses Ever Since

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