Liquidity, ownership concentration, corporate governance, and firm value: Evidence from Thailand

Prommin, Panu; Jumreornvong, Seksak; Jiraporn, Pornsit; Tong, Shenghui

doi:10.1016/j.gfj.2016.06.006

Cited by 49 publications

(31 citation statements)

References 48 publications

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“…Some studies (Zhai & Ma, 2017, Feng, Hu, Johansson, 2016Gonzalez et al, 2016;Arosa, 2010;Cabrera-Suarez, Martin-Santana, 2014;Ding et al, 2013;Hou et al, 2012;Leung et al, 2014;Prommin et al, 2016;Sun et al, 2016;Vintila & Gherghina, 2014;Farrer & Ramsay, 1998) confirm that there exists a strong relationship between ownership concentration and market risk which, in its turn, forms management behaviour, investment and business funding decisions. A potential investor, however, also analyses a company's ownership structure and assesses what risks this company faces and what decisions can therefore be expected.…”

Section: Literature Reviewmentioning

confidence: 99%

“…Some other studies (Arosa, 2010;Cabrera-Suarez, Martin-Santana, 2014;Ding et al, 2013;Farrer & Ramsay, 1998;Feng et al, 2016;Gonzalez et al, 2016;Hou et al, 2012;Leung et al, 2014;Prommin et al, 2016;Sun et al, 2016;Vintila & Gherghina, 2014;Zhai & Ma, 2017) focused on the relationship between market risk and ownership concentration cover a single country or a single region, but the results recorded in different regions or sectors are rarely compared. Minding the fact that economic shocks more or less affect all markets simultaneously (Batsaikhan et al, 2017, Bailey et al, 2018, the necessity of a cross-market comparison arises.…”

Section: Literature Reviewmentioning

confidence: 99%

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The Interaction between Ownership Concentration and Market Risk in European, American and Chinese Markets: the Effects of BREXIT

Bruneckienė

Mikalonis

Rapsikevičius

2020

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Today’s economy is facing various economic shocks, for instance BREXIT, that do not have any evidence from the past. Economic shocks directly affect market risks, the characteristics of which are observed by business company managers before making investment and operational decisions. Such decisions are directly affected by corporate ownership concentration and structure. The issue of ownership concentration in literature lacks approach when it is analysed in the interaction with market risk, caused by an economic shock. The contribution of this research to the discipline is the interaction between the indicators that reflect the impact of ownership concentration on corporate market risk by an economic shock (regression model was created). This model is proposed as a methodological tool to assess and analyse the scientific problem in question; it can also serve as a new and reliable instrument for business decision-makers and managers. An example of the data analysis representing European, American and Chinese markets as well as the United Kingdom as a country of origin of the economic shock under consideration is provided. The research proves that there exist statistically significant differences in the interaction between ownership concentration and corporate market risk in different markets. Also, it was found that BREXIT most significantly raised the risk in the UK market, as in the country of origin, in comparison to the risk observed in other markets. This paper contributes to the literature in corporate management decisions and systemic risk management; it also sheds light upon the economic-financial effects of the BREXIT process. Practical implication of this research is related to a focus on a detailed measurement instrument which allows to assess the systemic risk from a corporate management perspective.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Literature Reviewmentioning

confidence: 99%

The Interaction between Ownership Concentration and Market Risk in European, American and Chinese Markets: the Effects of BREXIT

Bruneckienė

Mikalonis

Rapsikevičius

2020

View full text Add to dashboard Cite

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“…For instance, Arjoon et al (2016) investigated companies that listed in Trinidad and Tobago Stock Exchange and revealed that greater institutional coverage was not related with greater liquidity, indicating that institutional owners have information advantages over stock owners. In the Thailand case, Prommin et al's (2016) current study showed that firms characterized by concentrated ownership display significant lower stock liquidity. This is because shareholders are expected to hold private information, which leads to information asymmetry and higher adverse selection cost.…”

Section: Ownership Structure and Stock Market Liquiditymentioning

confidence: 62%

“…On the other hand, the latter hypothesis posits that large stakes by blockholders minimizes the available floating shares and hence, the oversight role of insiders' blockholders would cost higher in light of market liquidity. More specifically, with concentrated firm ownership, fewer trades are made and free float is limited, thereby reducing liquidity (Demsetz, 1968;Prommin et al, 2016).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Corporate Governance, Ownership Structure and Stock Market Liquidity in Saudi Arabia: A Conceptual Research Framework

Alsahlawi

Ammer

2017

AFR

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This paper aimed to provide a review of the literature concerning the effects of corporate governance and ownership structure on the devices of market microstructure. It provided a clear overview of empirical archival studies in literature regarding the way corporate governance and ownership structure mechanisms influence market liquidity, with focusing on the Saudi institutional setting. It aimed to pinpoint the differences and similarities in empirical outcomes of studies and determine the areas that call for further exploration. On the basis of the thorough review of literature and the theoretical basis, our study proposed a conceptual research framework. The framework is based on the premise that effective corporate governance can lead to enhanced disclosure quality, which in turn, lead to mitigating the information asymmetry and ultimately, enhanced market liquidity. Although theoretical studies argued the presence of the relationship between corporate governance, ownership and liquidity, we find that outcomes from empirical studies are still mixed. Majority of extant studies, with majority in the context of the U.S. firms, provide ambiguous results, making it challenging to reconcile the differences among them. Our paper provides important guidance for both new and experienced researchers, and it has implications for stock exchange authorities in terms of adopting effective regulatory policies and efficient trading systems to tackle information asymmetry.

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“…Many academicians are interested to conduct study examining the impact of good corporate governance on the firm performance (Mashayekhi and Bazaz, 2008;Munisi and Randoy, 2013;Al-Najjar, 2014;Zagorchev and Gao, 2015;Balachandran and Faff, 2015;Subramanian, 2015;Abdallah and Ismail, 2016;Akbar et al, 2016;Ararat, Black and Yurtoglu, 2016;Chauhan, Lakshmi and Dey, 2016;Prommin et al, 2016). Good corporate governance could reduce the agency cost and make better protection for shareholder againts uncertainty in the future (Balachandran and Faff, 2015).…”

Section: Introductionmentioning

confidence: 99%

Could independent board, board meeting, audit committee, and risk committee improve the asset quality and operational performance a study of listed banks in Indonesia

Chou¹,

Buchdadi²

2017

Pressacademia

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Purpose -This study examines the impact of independent board of directors, board meeting, audit committee, and risk committee on bank practise in Indonesia. Methodology -Asset quality is measured by non-performing loans (NPL), and operational performance is measured by operational expense ratio (BOPO). While, as independent variables we used some good corporate governance variables including independent board (IB), the annual board meeting (BM), the percentage of annual board of director meeting attendance, the annual board-executive meeting (BEM), the percentage of annual board-executive meeting attendance, Audit Committee (AC), Audit Committee Meeting (ACM), the percentage of annual audit committee meeting attendance, Risk Committee (RC), Risk Committee Meeting (RCM), and the percentage of annual risk committee meeting attendance. The data are listed banks in Indonesian Capital Market during 2013-2015 using unbalanced panel data two stage least square (2SLS) regression. Findings-The findings reveal that independent board will improve the prudence principal of the bank. While the board of directors meeting will enhance the operational performance of the bank.In addition, the number of the audit committee will make better operational performance, while the number of meeting will improve the non-performing loan. Conclusion-Regarding these results the central bank and also the other stakeholders could maintain the role of the independent board of directors as well as the number of high quality annual meeting of the board. In addition, this study also reveals the role of the audit committee in banking business. This study supports the agency theory that monitoring activity will make the firm better performance.

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Liquidity, ownership concentration, corporate governance, and firm value: Evidence from Thailand

Cited by 49 publications

References 48 publications

The Interaction between Ownership Concentration and Market Risk in European, American and Chinese Markets: the Effects of BREXIT

The Interaction between Ownership Concentration and Market Risk in European, American and Chinese Markets: the Effects of BREXIT

Corporate Governance, Ownership Structure and Stock Market Liquidity in Saudi Arabia: A Conceptual Research Framework

Could independent board, board meeting, audit committee, and risk committee improve the asset quality and operational performance a study of listed banks in Indonesia

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