Privatization in Emerging Economies: An Agency Theory Perspective

Dharwadkar, Bavi; George, Gerard; Brandes, Pamela

doi:10.5465/amr.2000.3363533

Cited by 495 publications

(240 citation statements)

References 73 publications

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“…In addition, the state as a controlling shareholder may engage in related-party transactions to tunnel resources from listed subsidiary firms to other underperforming subsidiaries (Jiang et al, 2010). Relatedly, the state can harm the interests of the minority shareholders when it forces firms to appoint politicians as managers or to pursue projects on the basis of political and social returns instead of financial returns (Cuervo & Villalonga, 2000;Dharwadkar, George, & Brandes, 2000;Shleifer, 1998). Further, SOEs can become tools for politicians and friends of the state to advance their own political interests (Boycko, Shleifer, & Vishny, 1996;Shleifer & Vishny, 1994).…”

Section: Introductionmentioning

confidence: 99%

State ownership and securities fraud: A political governance perspective

Shi

Aguilera

Wang

2020

Corporate Governance

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Research question/issue This study attempts to shed new light on how the state as a controlling shareholder can affect the interests of minority shareholders by investigating the role of state ownership in deterring securities fraud commission. Research findings/insights Using archival data from a large sample of Chinese publicly traded firms, we uncover that state ownership is negatively associated with the likelihood of securities fraud commission. Further, CEO political background reinforces this negative relationship. We also uncover that firms with high state ownership are more likely to dismiss CEOs than those with low or no state ownership upon securities fraud detection. Theoretical/academic implications Departing from agency theory‐centric research on state ownership and corporate governance, this study introduces a political governance perspective to unpack the role of state ownership in corporate governance. Political governance refers to organizational control mechanisms deployed by political actors to achieve their objectives. Practitioner/policy implications Studying how political governance systems influence managerial behaviors is critical to gaining a complete insight into the implications of state ownership on corporate governance.

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Section: Introductionmentioning

confidence: 99%

State ownership and securities fraud: A political governance perspective

Shi

Aguilera

Wang

2020

Corporate Governance

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“…Surprisingly, a large number of corporate governance literature has taken place in the most developed economies particularly in Europe and U.S. After hitting hard by Asian financial crisis (1997)(1998), the landscape of corporate governance significantly changed and improved in many Asian countries (Mashayekhi and Bazaz, 2008) as effective governance is critical to all economic transactions, especially in emerging and transitioning economies (Dharwadkar et al, 2000;Judge et al, 2003). Thus, from emerging economies, Bangladesh has also implemented CG in 2006 to respond to the global regulatory changes.…”

Section: Asian Economic and Financial Reviewmentioning

confidence: 99%

Does Bank Corporate Governance Matter for Bank Performance and Risk-Taking? New Insights of an Emerging Economy

Moudud‐Ul‐Huq

Zheng

Gupta

2018

Asian Economic and Financial Review

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Article History JEL Classification:C2; E43; G21; G28; G34.This study empirically focuses on the effects of corporate governance on bank performance and risk-taking during the financial crisis of [2007][2008]. Using a balanced panel data in an emerging economy, we examine whether banks with corporate governance mechanism have heterogeneous effect on profitability and risk-taking amidst the crisis. Our empirical findings show that corporate governance derives benefits concerning profitability and risk-taking for the banks. Particularly, the key results are as follows: (i) corporate governance is a good mechanism of abating risk during global financial crisis; (ii) a U-shaped negative relation exists between corporate governance, profitability, and risk-taking; (iii) notably, corporate governance in Islamic bank is superior to conventional bank that can increase the stability of efficiency; and (iv) corporate governance has long-run effects on profitability and risk-taking behavior. Contribution/ Originality:This study contributes to the existing literature in the following ways: first, considering Bangladesh as an emerging economy, it shows both linear and non-linear impact of corporate governance by addressing recent financial crisis on bank performance and risk-taking behavior; second, it empirically uses efficiency stability as an inverse measure of risk; and finally, it includes generalized method of moments (GMM) and dynamic ordinary least square (DOLS) together in governance literature.

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“…A high level of ownership concentration may also reduce the information asymmetry between the principal and the agent because owners can request management information in a more rapid and centralized manner. Furthermore, with higher levels of ownership concentration, shareholders can prevent the opportunistic behavior of managers, who tend to become more committed to maximizing firm value (Dharwadkar, George, & Brandes, 2000).…”

Section: Agency Conflict Between Mnes and Their International Operationsmentioning

confidence: 99%

Effects of Internationalization on Ownership Structure: Evidence from Latin American Firms

Sheng

Pereira²

2014

BAR, Braz. Adm. Rev.

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We analyze the direct and simultaneous effects of internationalization on the ownership structure of Latin American companies based on agency theory. Using a sample of 425 Latin American firms between 2007 and 2011, which corresponds to 1,776 observations, we use random effects and three-stage least squares panel data regression to test these effects. We find that the hypothesized positive effect of internationalization on ownership concentration is rejected. Our results support the negative relationship that is predicted by principal-agent theory when analyzing the effect of ownership on the degree of internationalization. Greater internationalization via the equity entry mode is associated with lower levels of ownership concentration. Finally, there is simultaneity in the determination of the relationship between the degree of internationalization and ownership concentration.

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Privatization in Emerging Economies: An Agency Theory Perspective

Cited by 495 publications

References 73 publications

State ownership and securities fraud: A political governance perspective

State ownership and securities fraud: A political governance perspective

Does Bank Corporate Governance Matter for Bank Performance and Risk-Taking? New Insights of an Emerging Economy

Effects of Internationalization on Ownership Structure: Evidence from Latin American Firms

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