Determinants of corporate ownership and board structure: evidence from Singapore

Mak, Yuen Teen; Li, Yuan

doi:10.1016/s0929-1199(01)00021-9

Cited by 352 publications

(290 citation statements)

References 23 publications

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“…Studies that have adopted this approach include Demsetz and Lehn's (1985) investigation of the determinants of ownership concentration, Himmelberg et al's (1999) examination of the determinants of managerial ownership, Hermalin and Weisbach's (1991) investigation of the interaction between board composition and insider ownership and their effect on performance, and Cho's (1998) study of the interactions between managerial ownership, investment and corporate value. Agrawal and Knoeber (1996) and Mak and Li (2001) adopt the same approach but work with a more complete set of governance mechanisms.…”

Section: Introductionmentioning

confidence: 99%

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Board structure, ownership structure and firm performance: evidence from banking

Belkhir

2009

Applied Financial Economics

108

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RésuméCet article examine les relations qui puissent exister entre les caractéristiques de la structure de propriété et du conseil d'administration dans un échantillon de 260 banques commerciales et banquescaisses d'épargne. Ces caractéristiques de gouvernance, destinées à réduire les problèmes d'agence entre actionnaires et dirigeants, sont la participation des dirigeants dans le capital, la participation d'actionnaires majoritaires dans le capital, la proportion des administrateurs externes, la structure de leadership du conseil d'administration, et la taille du conseil d'administration. Utilisant la méthode des doubles moindres carrés, nous présentons des résultats qui favorisent l'idée selon laquelle les banques substituent entre les différents mécanismes de gouvernance qui alignent les intérêts des actionnaires et dirigeants. Ces résultats suggèrent que les régressions par les moindres carrés ordinaires (MCO) de mesures de la performance bancaire sur des mécanismes individuels de gouvernance peuvent induire en erreur. En effet, les estimations révèlent qu'il y a des relations statistiquement significatives entre la performance et la participation des dirigeants et des actionnaires majoritaires dans le capital lorsque les MCO sont utilisés. Cependant, ces relations statistiquement significatives disparaissent lorsque le cadre de travail des équations simultanées est utilisé. Ensemble, ces résultats suggèrent que les banques utilisent de manière optimale les différents mécanismes de gouvernance qui sont à leur disposition. AbstractThis paper examines the interrelations among five ownership and board characteristics in a sample of 260 bank and savings-and-loan holding companies. These governance characteristics, designed to reduce agency problems between shareholders and managers, are insider ownership, blockholder ownership, the proportion of outside directors, board leadership structure, and board size. Using two-stage least squares regressions, we present evidence of interdependencies between board and ownership structures. The results suggest that banks substitute between governance mechanisms that align the interests of managers and shareholders. These findings suggest that cross-sectional OLS regressions of bank performance on single governance mechanisms may be misleading. Indeed, we find statistically significant relationships between performance and insider ownership and blockholder ownership when using OLS regressions. However, these statistically significant relationships disappear when the simultaneous equations framework is used. Together, these findings are consistent with optimal use of each governance mechanism by banks.Keywords : Corporate governance, board structure, ownership structure, performance, banking, simultaneous equations.JEL classification : G21, G32, G34. * This paper was written while I was a Fulbright visiting scholar at the FIREL department of the University of North Texas. I am grateful to Christophe Hurlin and Mazhar Siddiqi for helpful comments and to JeanPaul Pollin for his...

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Section: Introductionmentioning

confidence: 99%

“…First, contrary to both studies we work with a more complete set of governance variables, which relate to board and ownership structure. In this respect, our study compares more to Agrawal and Knoeber (1996) and Mak and Li (2001). Second, we use a data set from a recent period; the year 2002.…”

Section: Introductionmentioning

confidence: 99%

Board structure, ownership structure and firm performance: evidence from banking

Belkhir

2009

Applied Financial Economics

108

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“…Prior studies have also found that the presence of independent directors on boards may improve the quality of financial statements and corporate disclosures (Chen and Jaggi, 2000;Xie et al, 2001;Cheng and Courtenay, 2004;(Samaha et al, 2012;Al-Moataz and Hussainey, 2010;. For example, Mak and Li (2001) examined the determinants and interrelationships among corporate ownership characteristics and boards of directors using a sample of Singaporean listed firms. The study found that corporate ownership and board structures are related.…”

Section: H3: Sector Membership Explains Fi Disclosures Corporate Govementioning

confidence: 99%

“…This arrangement for corporate control generates agency costs resulting from the conflicting interests between (i) management and owners, and (ii) across different classes of owners (Al-Moataz and Hussainey, 2010;Samaha et al, 2012;Klai and Omr, 2011;Ho et al, 2013). In other words, the greater the percentage of stocks owned by top managers, the more likely it is that they make decisions consistent with maximizing a company's wealth and providing transparent financial statements in order to optimise the current share price (Mak and Li, 2001). …”

Section: Ownership Structurementioning

confidence: 99%

“…Hence, the tendency for a company with a substantial number of public individuals on among its investors to adequately disclose information in its annual report is likely to be high in order to minimise agency costs. However, in countries where the State (e.g., China and Singapore), banks (e.g., Germany and Japan) or certain families (e.g., Hong Kong) have substantial equity holdings or where equity ownership is highly concentrated, there is generally little or no physical separation between those who own, and those who manage a business (Wallace, 1988, Wallace andNasar, 1995;Mak and Li, 2001). In such cases, capital owners have greater access to internal information about their company, and may not have to rely on public disclosures to monitor their investments.…”

Section: Ownership Structurementioning

confidence: 99%

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Factors affecting financial instruments disclosure in emerging economies: the case of Jordan

Tahat

Mardini

Power

2017

AAJFA

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Abstract:The current study investigates factors affecting Financial Instruments (FI) disclosure for a sample of Jordanian listed companies (82 firms) over two consecutive years (2013 and 2014). An un-weighted disclosure index is used to examine the extent of FI disclosure. In addition, the study employs a number of multiple regression models to examine the determinants of FI disclosure. The findings indicate that the level of FI disclosure provided by the sample firms is relatively low with only 52% of FI-related items being supplied. In addition, the results illustrate that the level of FI-related disclosure has a statistically positive association with firm size, the audit firm employed and corporate governance attributes. However, the current study fails to document significant associations between FI disclosure and firm industry or ownership structure variables. This research provides a number of insights for policy makers. First, the results of the current study could help the IASB when revisiting FI-related accounting standards to consider an emerging country's perspective. In addition, it provides some insights to accounting regulators in Jordan about how Jordanian listed firms respond to IFRS 7 requirements.

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Financial distress prediction model: The effects of corporate governance indicators

Chen

Lien

2020

Journal of Forecasting

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This paper constructs a financial distress prediction model that includes not only traditional financial variables, but also several important corporate governance variables. Using data from Taiwan, the empirical results show that the best in-sample and out-of-sample prediction models should combine the financial variables with the corporate governance variables. Moreover, the prediction accuracy is higher for the models using dynamic distress threshold values than those with tradition threshold values. Most financial ratios, except for the debt ratio, are higher in financially sound companies than in financial distressed ones. With regard to the corporate governance variables, we find that the CEO/Chairman duality may not result in the outbreak of financial distress, but higher equity pledge ratios of managers (shareholding ratios by board members and insiders) positively (negatively) correlate with financial distress.

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Determinants of corporate ownership and board structure: evidence from Singapore

Cited by 352 publications

References 23 publications

Board structure, ownership structure and firm performance: evidence from banking

Board structure, ownership structure and firm performance: evidence from banking

Factors affecting financial instruments disclosure in emerging economies: the case of Jordan

Financial distress prediction model: The effects of corporate governance indicators

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