Study on corporate governance mechanisms

Mishra, Rekha Agarwal; Kapil, Sheeba

doi:10.1504/ijicbm.2016.074480

Cited by 9 publications

(11 citation statements)

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“…The biggest threat to corporate governance is the managerial entrenchment effect that may arise from larger managerial ownership could create unbalanced authority over other stakeholders. So, a tradeoff between managerial entrenchment and alignment consequence should be ensured for effective managerial ownership (Mishra and Kapil, 2016). The managerial entrenchment effect could create an agency problem between managers and stockholders.…”

Section: Literature Reviewmentioning

confidence: 99%

“…But, government specialized banks are in the worst financial stability than public and private commercial banks, whereas Islamic banks especially "Islami Bank Bangladesh Limited (IBBL)" are in utmost sound financial stability rather than all commercial banks and specialized banks in Bangladesh (Ahmad and Hassan, 2007). However, this study narrowed the gap between a trend of an entrenchment effect and the interest alignment effect to AJAR 5,2 identify the level of managerial ownership, because the ownership level of management has a significant impact on the value of the firm (Ullah and Shah, 2014;Mishra and Kapil, 2016;Dixon et al, 2017).…”

Section: Introductionmentioning

confidence: 95%

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Effect of managerial ownership on bank value: insights of an emerging economy

Moudud‐Ul‐Huq

Biswas

Dola

2020

AJAR

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PurposeThis study aims to empirically investigate the effect of managerial ownership on bank value concerning conventional and Islamic bank. The analysis uses a balanced panel data set based on a sample consisting of 480 bank-year observations between 2003 and 2017.Design/methodology/approachOrdinary least squares, fixed effect and random effect have been used primarily to examine the relationship between managerial ownership and banks' value. Later, the authors validate the core results by using the generalized linear model.FindingsThis study provides general support for the claim of interest alignment that encourages bank standards with a high level of managerial ownership and partly opposes the view of the entrenchment effects.Originality/valueA good number of studies are available in the current literature, which examine the impact of managerial ownership on either bank performance or risk-taking. However, very few studies are found that examine the bidirectional relationship between managerial ownership and banks' value. Moreover, to the best of authors’ knowledge, there is a dearth of literature on this topic that is built on the comparative analysis between conventional and Islamic banks.

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Section: Literature Reviewmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 95%

Effect of managerial ownership on bank value: insights of an emerging economy

Moudud‐Ul‐Huq

Biswas

Dola

2020

AJAR

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“…It is well established that firms differ across ownership structures as to the type of owners (insiders, foreign, institutional) and the type of ownership (whether concentrated or not). Studies by Imam and Malik (2007) and Mishra and Kapil (2016) examined how corporate governance is practiced through ownership structure and how firm's performance as well as its dividend payout policy is influenced by different ownership pattern. It was found that foreign holding is positively and significantly related to the firm performance.…”

Section: Discussion On Findings Kgi 1 -Ownership Structure Of the Companiesmentioning

confidence: 99%

Sustainability enhancement of corporate governance regime in India

Kansil

Singh

2018

WJSTSD

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Purpose There is lack of research on key governance issues (KGIs) to expedite the sustainability of corporate governance reforms in the Indian context. The purpose of this paper is to formulate a list of KGIs that would help in sustainability enhancement of corporate governance regime in India vis-à-vis other global counterparts. Design/methodology/approach First, governance issues have been identified after a thorough literature review and after taking opinion and suggestions of experts. Second, data have been collected through the questionnaire survey. Lastly, a model based on fuzzy set theory has been designed to identify the KGIs for the sustainability enhancement of corporate governance regime in the Indian context. Findings Five KGIs have been identified in this study based on fuzzy set theory, namely, ownership structure of the companies, code of best practices of corporate governance, regulatory framework including monitoring institutions of the country, untrue independence of independent directors in decision-making and judiciary system of the country. Research limitations/implications The KGIs identified for the Indian economy in this study can be a useful reference for the regulators and policymakers to fill the present quality gap and devise measures to curb noncompliance and or implementation of laws on the ground level. Practical implications The KGIs identified for the Indian economy in this study can be a useful reference for the regulators and policymakers to fill the present quality gap and devise measures to curb noncompliance and/or implementation of laws on the ground level. Originality/value The novelty of this study stems from the fact that very few studies have assessed the perception of stakeholder’s about the current corporate regime in India. No study has identified KGIs.

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“…However, the relationship between increased stake for block holders and firm performance is not always monotonically increasing, because after becoming too strong block holders may try to extract benefits more than their proportionate share that includes private benefits of control also (Holderness [37]). Thus, value creation through ownership concentration will be a tradeoff between increased shared benefits created and private extraction of values (Mishra and Kapil [38]).…”

Section: Theoretical Background and Hypothesesmentioning

confidence: 99%

“…However, in the situation of greater managerial ownership, managers may act in discretion for utilisation of the surplus generated and may take steps to prolong their stay in the firm (even if it is not justified from value creation perspective termed as managerial entrenchment by Shleifer and Vishny [40]) because of disproportionate power available to them. Thus, the value creation through increased managerial ownership will be a trade-off between entrenchment effect and alignment effect (Mishra and Kapil [38]). However, if their stakes are beyond a threshold level, where they would be in a position to exploit minority shareholders, then, there would be a decrease in firm value (Richter and Chakraborty [43]; Ohadi et al [44]; Sahu [45]; Kakani et al [46]).…”

Section: Theoretical Background and Hypothesesmentioning

confidence: 99%

Corporate Governance and Firm Performance in Emerging Markets: Evidence from India

Kapil¹,

Mishra²

2019

TEL

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This study attempts to explore the link between corporate governance system developed by firms like promoter ownership, institutional relationship (as percentage ownership in the firm), foreign institutional investors (FII) ownership, board size (log assets), family control which is a significant indicator for board independence. Further we have also taken CEO duality, number of board meetings and busyness of directors and linked it with firm performance. Market based firm performance measures and accounting based performance show different impact. Findings indicate that impact of corporate governance variables on market based performance measures (Tobin's Q) is greater than the impact on accounting based performance measures (ROA and ROE). Ownership structure i.e. family capitalism impacts market based performance measures more whereas board structure impacts accounting based performance measure more. Among board variables, board size is found to impact performance positively and CEO duality is found to impact performance negatively. Board independence i.e. "monitoring board" is found to impact accounting based performance positively, whereas number of board meetings is found to impact market based performance measure positively. Directors' internal busyness is not found to impact any of the performance measures. Directors' external busyness is impacting accounting based measures negatively when the busyness is measured in terms of position of directors in other companies.

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Study on corporate governance mechanisms

Cited by 9 publications

References 0 publications

Effect of managerial ownership on bank value: insights of an emerging economy

Effect of managerial ownership on bank value: insights of an emerging economy

Sustainability enhancement of corporate governance regime in India

Corporate Governance and Firm Performance in Emerging Markets: Evidence from India

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