Leverage, Ownership Structure and Firm Performance

Ali, Javid; Tahira, Yasmeen; Amir, Muhammad; Ullah, Farman; Tahir, Muhammad; Shah, Wilayat; Khan, I. Bruce Greenwald Ii. Judd; Tariq, Shahbaz

doi:10.4236/jfrm.2022.111002

Cited by 10 publications

(22 citation statements)

References 34 publications

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“…In such an environment, negative media reports have a relatively large impact on society, greatly weakening managers’ self-confidence and investment enthusiasm, and in order to maintain their own reputation, it will reduce irrational decision-making and reduce excessive investment. At this time, the negative media reports will have a greater impact on enterprises and society, but can better play the role of enterprise governance ( Ali et al, 2022 ; Yeoh and Hooy, 2022 ). To sum up, this paper proposes the hypothesis H3b:…”

Section: Research Hypothesismentioning

confidence: 99%

Analysis of the influence of enterprise managers’ overconfidence on the overinvestment behavior of listed companies under the media reports

2022

Front. Psychol.

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At present, there is a common overinvestment behavior among listed companies in various countries, which seriously reduces the overall resource allocation efficiency of the market. With the rise of behavioral finance, it has become a new direction to study the influence of managers’ “irrational characteristics” on enterprise overinvestment. With the rapid rise of the media industry, media reporting, as an external governance mechanism, supplements the capital market supervision system and has a huge impact on the investment behavior of enterprises. How media reports affects overinvestment and whether it can curb overinvestment caused by managers’ overconfidence is still worthy of further study. This paper took 6,012 A-share listed companies from 2013 to 2021 as samples, and based on the perspective of “media reports,” studies the impact of managers’ overconfidence on overinvestment; explores whether positive and negative media reports have a moderating effect between overconfidence and overinvestment; studies the moderating effect of media reports under different marketization processes. Empirical conclusions: (1) Managers’ overconfidence will lead to overinvestment of enterprises. (2) Positive media reports will aggravate the overinvestment caused by managers’ overconfidence; negative reports can inhibit the overinvestment caused by managers’ overconfidence. (3) In regions with higher marketization, positive media reports play a more significant role in aggravating overconfidence and leading to overinvestment; in regions with lower marketization, negative reports play a stronger role in restraining overconfidence and overinvestment.

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Section: Research Hypothesismentioning

confidence: 99%

Analysis of the influence of enterprise managers’ overconfidence on the overinvestment behavior of listed companies under the media reports

2022

Front. Psychol.

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“…Adapula rasio yang dipilih untuk digunakann pada penelitian ini adalah Return on Asset (ROA) dan Return on Equity (ROE) dimana kedua rasio ini adalah rasio yang biasanya digunakan untuk mengukur kinerja perusahaan. (Ali et al, 2022). Dengan melihat ROA akan membantu pihak-pihak di perusahaan seperti manajer hingga investor atau stakeholder untuk melihat seberapa efisien perusahaan menggunakan assetnya dalam menghasilkan profit.…”

Section: Tinjauan Pustaka Firm Performanceunclassified

“…Penelitian sebelumnya yang mendapatkan hasil bahwaFukuranFperusahaan disini tidak memiliki pengaruh terhadap kinerja perusahaan (Freihat, Farhan and Shanikat, 2019). Variabel control kedua adalah laba bersih perusahaan yang didapatkan dari pengukuran laba bersih dan sudah tertera pada laporan keuangan (Ali et al, 2022). Laba bersih adalah besaran keuntungan yang diterima oleh perusahaan yang sudah dikurangi dengan beban serta biaya atas operasional yang sudah dilakukan.…”

Section: Firm's Size Dan Net Incomeunclassified

“…Hafeez menyatakan bahwa leverage tidak memiliki dampak negatif terhadap kinerja keuangan, melainkan meningkatkan kinerja keuangan perusahaan. Penelitian sebelumnya oleh (Ali et al, 2022) melihat adanya pengaruh negatif leverage terhadap kinerja perusahaan. Selain itu pada kepemilikan institusional hasil dari penelitian (Ali et al, 2022), dan (Ogabo, Ogar and Nuipoko, 2021) menunjukkan bahwa adanya pengaruh negatif terhadap kinerja perusahaan.…”

Section: Kerangka Konseptualunclassified

“…Penelitian sebelumnya oleh (Ali et al, 2022) melihat adanya pengaruh negatif leverage terhadap kinerja perusahaan. Selain itu pada kepemilikan institusional hasil dari penelitian (Ali et al, 2022), dan (Ogabo, Ogar and Nuipoko, 2021) menunjukkan bahwa adanya pengaruh negatif terhadap kinerja perusahaan. Hasil penelitian dari (Mertzanis, Basuony and Mohamed, 2019) melihat adanya variabel kontrol yaitu ukuran perusahaan berpengaruh negative terhadap kinerja perusahaan.…”

Section: Kerangka Konseptualunclassified

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Pengaruh Leverage dan Struktur Kepemilikan terhadap Kinerja Perusahaan pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia

Setiadi

Lestari²

2022

jmas

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Leverage and ownership structure are important aspect on firm performance. Because of that the purpose of this study is to determine the effect of leverage and ownership structure on firm performance. The independent variables in this study are leverage, institutional ownership and foreign ownership. The dependent variable in this study is Firm performance, while the control variable consists of company size and company net income. On the Firm performance, in this study using the measurement of Return on Assets (ROA) and Return on Equity (ROE). This study uses panel data analysis and was conducted by collecting data from 31 manufacturing companies in Indonesia in the period 2016 to 2020. This study found a negative relationship between leverage on firm performance while firm size had a negative relationship with Firm performance with ROE and a positive relationship with ROA. The results of the study of foreign ownership have a positive effect on the performance of companies with ROA and ROE and for the results of net income and institutional ownership have a negative effect on the performance of companies with ROE, while the results of research on net income and institutional ownership have a positive influence on the performance of companies with ROA.

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Revisiting the corporate governance and corporate performance nexus: evidence from value-based metrics

Yakubu,

Kapusuzoglu,

Ceylan

2023

JEAS

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Purpose This study seeks to empirically examine the influence of corporate governance on corporate performance in Ghana.Design/methodology/approach The study employs data from 30 listed firms spanning from 2008 to 2018 and applies the generalized method of moments technique. The authors use economic value added, shareholder value added (SVA) and economic margin (EM) as measures of corporate performance.Findings The findings reveal that the presence of both inside directors and outside (nonexecutive) directors significantly improves corporate performance, lending credence to both the stewardship theory and the agency theory. The inclusion of women on the corporate boards and frequent meetings of the board reduce the economic profits of firms. The authors find that CEO duality impedes corporate performance, supporting the presumption of the agency theory. The study further reveals that audit committee size and ownership concentration positively drive the performance of quoted firms in Ghana.Originality/value Prior studies on corporate governance and firm performance nexus have chiefly adopted traditional accounting-based performance measures such as return on assets and return on equity to evaluate firm performance. However, these indicators are critiqued for being historic and fail to consider firms' cost of equity. In light of the shortcomings of the accounting-based proxies, this study takes a unique direction by using value-based metrics, which are considered superior measures of performance. Besides, to the best of the authors' knowledge, this study provides a first attempt to investigate the link between corporate governance and firm performance using SVA and EM as performance indicators.

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Leverage, Ownership Structure and Firm Performance

Cited by 10 publications

References 34 publications

Analysis of the influence of enterprise managers’ overconfidence on the overinvestment behavior of listed companies under the media reports

Analysis of the influence of enterprise managers’ overconfidence on the overinvestment behavior of listed companies under the media reports

Pengaruh Leverage dan Struktur Kepemilikan terhadap Kinerja Perusahaan pada Perusahaan Manufaktur yang Terdaftar di Bursa Efek Indonesia

Revisiting the corporate governance and corporate performance nexus: evidence from value-based metrics

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