Intraday market liquidity, corporate governance, and ownership structure in markets with weak shareholder protection: evidence from Brazil and Chile

Cueto, Diego C.; Switzer, Lorne N.

doi:10.1007/s10997-013-9263-8

Cited by 6 publications

(3 citation statements)

References 32 publications

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“…Similarly, even though the number of non-executive directors also had a positive impact on firm performance, it was not statistically significant which might be attributed to smaller sample size. This particular finding is in line with the literature which stated how a bigger portion of non-executive directors would bring improved firm performance in countries where legal protection for the shareholders are weak (Burkart & Panunzi, 2006;Cueto & Switzer, 2015). Bangladesh, with its political instability and level of corruption existing in different areas of the economy, is surely one of those countries with fragile legal protection (Nurunnabi, Hossain, & Al-Mosa, 2016).…”

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confidence: 87%

Do Multinational Companies Practice Good Corporate Governance? Empirical Evidence from Bangladesh

Ullah

Ahmed

Jamshed

2017

ijafr

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Corporate Governance refers to the way an organization is directed, administrated or controlled. It includes the set of rules and regulations that affect the manager's decision and contribute to the way company is perceived by the current and potential stakeholders. The corporate governance structure specifies the distribution of rights and responsibilities among different participants in the corporation such as; boards, managers, shareholders and other stakeholders and spells out the rules and procedures and also decision-making assistance on corporate affairs. Corporate governance practices in Bangladesh are gradually being introduced in most companies and organizations (Du, 2006). However, Bangladesh has fallen behind its neighboring countries and global economy in corporate governance (Gillibrand, 2004). Corporate governance structure is mainly considered ambiguous. Specific governance structures or practices will not necessarily fit all companies at all times. Firms with strong corporate governance mechanisms are generally associated with better financial performance, higher firm valuation and higher stock returns. Unfortunately, investors in Bangladesh have a little information about how these corporate values affect the performance of the Multinational Companies (MNCs). This study aims to provide a quantitative contribution to the literature by examining the impact of corporate governance mechanisms on financial performance from the perspective of MNCs. A panel data based Ordinary Least Squared (OLS) regression model was used to measure the quantitative significance of various corporate governance related variables on MNC performance, as identified through a detailed literature review.Keywords: corporate governance, multinational company (MNC), financial performance, Bangladesh Background of the StudyCorporate governance describes the structure of rights and responsibilities among the parties that have a stake in a firm (Aguilera & Jackson, 2003). A corporate governance system can be a set of processes and structures used to direct a corporation's business. A key objective of a corporate governance system should be the enhancement of shareholder wealth. Once implemented, an effective corporate governance system can help to ensure an appropriate division of power among shareholders, the board of directors, and management (Mcconomy & Bujaki, 2000). Firms with strong corporate governance mechanisms are generally associated with better financial performance, higher firm valuation and higher stock returns (Ammann, Oesch, & Schmid, 2011;Bebchuk, Cohen, & Ferrell, 2009;Brown & Caylor, 2006;Cremers & Ferrell, 2009;Gompers, Ishii, & Metrick, 2001;Johnson, Moorman, & Sorescu, 2009;Renders, Gaeremynck, & Sercu, 2010).Bangladesh is one of the emerging markets and most of the top companies are either family owned or controlled by corporate group or government. Corporate governance practices in Bangladesh are gradually being introduced in most companies and organizations. 66.7 percent of the companies have adop...

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supporting

confidence: 87%

Do Multinational Companies Practice Good Corporate Governance? Empirical Evidence from Bangladesh

Ullah

Ahmed

Jamshed

2017

ijafr

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“…Among these five countries, two of them (Brazil and Chile) are analyzed in this study. Brazil and Chile have common market characteristics and corporate governance approaches (Cueto & Switzer, 2015). Brazil represents a large Latin American economy, while Chile, though smaller, has had a more stable economy over the last 20 years (Chong & Lopezde-Silanes, 2007).…”

Section: Institutional Framework In Brazil and Chilementioning

confidence: 99%

The Effect of the Board Composition on Dividends: The Case of Brazilian and Chilean Family Firms

Turrent

Watkins-Fassler

Puente-Esparza

2020

EJFB

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Based on the agency theory, this paper analyzes whether family firms pay more dividends compared to no-family firms and identifies whether the board composition affects the dividend policy. Brazil and Chile have established mandatory dividends, retain lower cash holdings, pay higher dividends compared with other markets in the region. The sample of study is composed by 853 observations from 49 Brazilian and 32 Chilean top publicly listed firms in terms of market capitalization over the 11-year period from 2004 to 2014. Using an unbalanced panel data, results indicate that family controlled firms distribute more dividends and board composition namely; board size and the proportion of women on the board have a significant and positive impact on the dividend policy of the firm. By contrast, COB-CEO duality has a negative effect. Thus, dividend policy constitutes an effective corporate governance mechanism in mitigating the family’ expropriation of minority shareholders’ wealth.

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“…Ownership concentration (OC) prevails in various developing and emerging economies (Cueto & Switzer, 2015). Controlling shareholders (ownership concentration) monitor the activities of managers for exercising their control rights.…”

Section: Literature Reviewmentioning

confidence: 99%

Ownership Structure and Business Firm Value: A Study of Non-financial Sector of Pakistan

Usman¹,

Alam²

2020

SAJMS

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The basic purpose of this study is to examine the association of ownership structure (OS) with value of business firms (VBF). By using panel date techniques, the relationship between OS and VBF has been statistically tested. OS is used as an explanatory variable, whereas, for measuring VBF, accounting base performance measures (short term performance) includes return on assets (ROA) and return on equity (ROE) and market base performance (long term performance) has been measured through Tobin's Q. The study also emphasizes the firm age as an interactive variable. Ownership role is examined from the perspective of agency theory (AT) and by using resource dependence theory (RDT). The sample consists of 135 companies and having 1890 observations of non-financial sector listed on Pakistan Stock Exchange (PSX) for the time period 2004 to 2017. Researchers has applied descriptive and inferential statistics techniques to analyze the gathered data. Findings reveal that some dimensions of OS significantly influence the short term and long run firm performance (FP) under interactive role of age. The study aims at contributing useful knowledge generally for the financial community, and specifically for investors, researchers, and regulators.

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Intraday market liquidity, corporate governance, and ownership structure in markets with weak shareholder protection: evidence from Brazil and Chile

Cited by 6 publications

References 32 publications

Do Multinational Companies Practice Good Corporate Governance? Empirical Evidence from Bangladesh

Do Multinational Companies Practice Good Corporate Governance? Empirical Evidence from Bangladesh

The Effect of the Board Composition on Dividends: The Case of Brazilian and Chilean Family Firms

Ownership Structure and Business Firm Value: A Study of Non-financial Sector of Pakistan

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