The Relationship between Foreign Ownership and Firm Performance in India:An Empirical Analysis

Shrivastav, Shikha Mittal; Kalsie, Anjala

doi:10.21648/arthavij/2017/v59/i2/164448

Cited by 15 publications

(15 citation statements)

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“…Due to restrictions, FIIs in India hold a fragmented stake in the firms (Tables 1 and 4 ). With such a lower proportion and dispersed ownership, FIIs play a reluctant role in monitoring and are thus less likely to influence the firms (Khanna and Palepu 2000 ; Shrivastav and Kalsie 2017 ). Hence, the results of this study are not affected by endogeneity and causality.…”

Section: Determinants Of Foreign Ownership Of Domestic Stocksmentioning

confidence: 99%

Foreign Institutional Investors: Fair-Weather Friends or Smart Traders?

et al. 2021

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We examine a theoretically robust but previously undocumented issue of what drives foreign portfolio investments into emerging markets. Foreign institutional investors (FIIs) are often blamed as fair-weather friends who pull out their investment at the first sign of trouble. Using a bottom-up approach, we explore this possibility. We demonstrate the influence of the firm-specific factors such as size, book to market ratio, the riskiness of the stocks, stock prices, dividend yield, liquidity, leverage, and earnings on the FII ownership. We find no evidence to show foreign investors as fair-weather friends. Instead, they are smart traders who follow a diligent investment strategy. We suggest reforms in corporate governance and improvement in financial fundamentals of the companies to attract FII ownership. Supplementary Information The online version contains supplementary material available at 10.1007/s40953-021-00233-3.

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Section: Determinants Of Foreign Ownership Of Domestic Stocksmentioning

confidence: 99%

Foreign Institutional Investors: Fair-Weather Friends or Smart Traders?

et al. 2021

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“…Large and concentrated foreign ownership indicates low agency costs and high corporate value [15]. Shrivastav and Kalsie [8] analyzed a panel data of 145 Indian non-financial firms listed in the NSE for a five-year period (2008-2012). The positive influence on performance they found was due to the role of foreign investors in access to large resources, more intensive monitoring, management expertise, capital markets, and advanced technology.…”

Section: Foreign Ownership and Firm Performancementioning

confidence: 99%

“…Supervision of domestic firms by foreigners is associated with technology transfer [5]. Foreign firm ownership has an influence on Tobin's Q and ROA [9,8] Foreign institutions are strategic investors with their ownership that can increase firm productivity [19]. They invest only in superior firms that offer high market returns [9].…”

Section: Firm Vs Institutional Investormentioning

confidence: 99%

“…The independent variable of this study is Foreign Ownership (FO), measured by the percentage of shares controlled by foreign owners who are not individual investors at the end of the tax year. Previous studies broke down the impact of each ownership on performance, for example Shrivastav and Kalsie (8), so that in this study foreign ownership was further divided into two different variables, i.e., ownership by foreign companies (FC) and by foreign institutions (FI). Both variables were measured by the percentage of shares held by each owner.…”

Section: Independent Variablesmentioning

confidence: 99%

“…As found in Jensen & Meckling [3] and Shleifer & Vishny [4], large shareholders always have strong incentives to monitor management that can alleviate agency problems and increase firm performance. Foreign ownership enables technological innovation [5,6], efficiency or reduction in business risk [7], access to resources, capital markets, and management expertise [8]. The studies examining the separate effects of foreign corporate ownership and institutional investors on firm performance focus on the degree of the fragmentation of each type of ownership, where less fragmented foreign corporate ownership creates stronger incentives for these investors to monitor the firms where they invest, so firms are more efficient, superior in technology, and better in managerial expertise [5].…”

Section: Introductionmentioning

confidence: 99%

See 2 more Smart Citations

The Effect of Foreign Ownership on Firm Performance: Evidences from Indonesia

Nofal¹

2020

Proceedings of the 3rd Asia Pacific International Conference of Management and Business Science (AICMBS 2019)

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This study examines the effect of foreign ownership on firm performance using a panel data consisting of 66 non-financial firms listed in the Indonesia Stock Exchange. Five-year period data from 2014 to 2018 is considered. The result of the random effects model indicates that foreign ownership has a positive and significant effect on firm performance; foreign firm ownership is found to have more roles in encouraging performance than what foreign institutional investors can do. This result is consistent with the facts about foreign ownership in Indonesia, where high and stable foreign ownership, in the long run, is beneficial for domestic companies, due to effective monitoring, facilitation of technology usage, international market development, and professional management. The problems in this study is limited due to the fact that the firms being studied, either companies or institutions, are mostly owned by single foreign investors

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Foreign ownership and product market competition's influence on firm performance: Mediating role of the corporate governance index

Tran,

Ha,

2024

Bus Strat Dev

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This study examines the influence of foreign ownership and product market competition on firm performance in Vietnam's listed companies through the mediating role of the corporate governance index. Moreover, the study explores the moderating role of business strategy in the relationships between foreign ownership, product market competition, and firm performance. We use maximum likelihood structural equation modeling in Stata 14 software to analyze the data collected from 180 Vietnamese listed companies from 2015 to 2019. The results indicate that foreign ownership and product market competition positively influence firm performance by mediating the corporate governance index. Business strategy negatively moderates the relationship between product market competition and firm performance. This study has implications for managers focusing on foreign ownership and product market competition to improve corporate governance systems, enhancing firm performance. Additionally, managers may build business strategies when product market competition increases to avoid negative effects on firm performance.

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The Relationship between Foreign Ownership and Firm Performance in India:An Empirical Analysis

Cited by 15 publications

References 0 publications

Foreign Institutional Investors: Fair-Weather Friends or Smart Traders?

Foreign Institutional Investors: Fair-Weather Friends or Smart Traders?

The Effect of Foreign Ownership on Firm Performance: Evidences from Indonesia

Foreign ownership and product market competition's influence on firm performance: Mediating role of the corporate governance index

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