Promoter ownership, institutional ownership, and firm performance

Sahoo, Minati; Srivastava, Kailash B. L.; Gupta, Neeraj; Mittal, Sachin Kumar; Bakhshi, Priti; Agarwal, Tarun

doi:10.22495/cocv20i1art15

COC

2022

DOI: 10.22495/cocv20i1art15

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Promoter ownership, institutional ownership, and firm performance

Minati Sahoo

Kailash B. L. Srivastava

Neeraj Gupta

et al.

Abstract: The study aims to examine the relationship between ownership structure and firm performance. We have analyzed the data of 113 firms with 565 observations from 2013 to 2017 using the fixed panel data estimation approach. A subsample analysis has been employed by dividing the data based on firm size, board size, and firm age to test the robustness of the analysis. Results indicate a positive impact of domestic promoters, foreign promoters, and institutional shareholders on firm performance, whereas non-instituti… Show more

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Cited by 4 publications

References 107 publications

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Does corporate governance moderate the impact of earnings management on capital structure of the listed corporations on Palestine and Amman Bourses

Abualhassan,

Nour,

Atout

et al. 2024

Discov Sustain

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The purpose of this research is to investigate the moderating role of corporate governance on the relationship between earnings management and debt level in capital structure. The paper used a hypothesis-testing research approach to gather data from the annual reports of 13 industrial companies listed on Palestine Exchange and 25 Jordanian companies listed on Amman Stock Exchange from 2013 to 2020. Descriptive and inferential statistics were employed, along with correlation analysis to evaluate linear relationships between variables. The fixed and random effect regressions were utilized to develop the research model. In the case of Palestinian manufacturing firms, the results revealed that Earnings Management (EM) had a significant negative impact on debt level. According to the moderating role of Corporate Governance (CG), larger boards and the existence of female members on the board of directors causes an increase in the high-leverage impact of EM, whereas CEO duality mitigates the high-leverage impact. However, in the case of Jordanian manufacturing firms, EM showed an insignificant impact on debt level. Regarding the moderating role of CG, it was proved that the presence of female members on the board of directors increased the firm’s reliance on debt financing as a result of EM practices, while institutional investors mitigate the effect of EM on debt financing, leading to a decrease in reliance on debt. The findings of this research are suitable for the regulators while formulating policies on the Corporate Governance and the Impact of Earnings Management on Capital Structure. These findings have guided the policymakers that they should enhance their focus on Palestine and Jordan companies to test Corporate Governance Moderates the Impact of Earnings Management on Capital Structure. This study is also helpful for the new researcher while investigating this area in the future.

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Does corporate governance moderate the impact of earnings management on capital structure of the listed corporations on Palestine and Amman Bourses

Abualhassan,

Nour,

Atout

et al. 2024

Discov Sustain

View full text Add to dashboard Cite

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Agency cost: Ownership structure and board composition — An empirical analysis

Bijoy,

Mangla

2023

COC

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This study evaluates the ownership structure and board composition as an effective corporate governance mechanism to control agency costs. It uses pooled ordinary least squares (OLS) regression methodology on the annual panel data from 2010–2011 to 2021–2022 for 985 non-financial companies listed on the National Stock Exchange (NSE) of India, collected from the ProwessIQ database. Globally, agency costs have been measured mainly by two proxies: asset turnover ratio (ATR) and operating cost ratio (OPEX) whereas, this study has used two additional proxies: return on total assets (ROA) and interest coverage ratio (ICR). The study also takes into account the impact of all types of ownership holdings namely, promoters’, government, domestic and foreign institutional investors on the agency cost. It is observed that agency costs are significantly lower with both foreign and domestic institutional investor ownerships and it is inversely related to the number of independent directors, as well as the size of the board. The findings of this study, on the one hand, will be beneficial for the corporate houses in resolving the problem of principal-agent conflicts whereas, on the other side, it will help the policymakers in deciding the policies with respect to the composition of the board members and ownership structure.

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Audit committee nominee directors and bank performance: Evidence from Indian banks

Gupta,

Ansari,

Dammalapati

et al. 2023

COC

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The audit committee (AC) in the Indian public sector banks consists of executive directors, Reserve Bank of India nominee directors, and the central government nominee directors in addition to independent directors, whereas the AC in the private sector banks consists mostly of independent directors. The difference in the constitution of the AC across different ownership may have a different impact on their performance. Hence, this study aims to investigate the impact of the nominee directors on the audit committee and the performance of the Indian listed banks. The study uses the panel data approach. We have taken 21 public sector banks and 15 private sector banks operating in the Indian banking sector. The fixed effects estimation technique to examine the relationship between the audit committee constituents and bank performance during the period 2009–2010 to 2016–2017 was used. It was found that CEO chairman duality, the presence of the chartered accountant (CA) director, AC chairman, and AC bear a positive relationship with bank performance. The findings are more or less consistent across the various bank performance measures and sub-samples classified based on the bank size, audit committee size, and ownership of the banks. The study explores the relationship between nominee directors and bank performance. The study provides insights to policy regulators and policymakers who are entrusted with the establishment of ACs in the banks in light of ongoing regulatory reforms.

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Promoter ownership, institutional ownership, and firm performance

Cited by 4 publications

References 107 publications

Does corporate governance moderate the impact of earnings management on capital structure of the listed corporations on Palestine and Amman Bourses

Does corporate governance moderate the impact of earnings management on capital structure of the listed corporations on Palestine and Amman Bourses

Agency cost: Ownership structure and board composition — An empirical analysis

Audit committee nominee directors and bank performance: Evidence from Indian banks

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