IDEAS home Printed from https://ideas.repec.org/p/pra/mprapa/37566.html
   My bibliography  Save this paper

Impact of Family Ownership concentration on the Firm’s Performance: Evidence from Pakistani Capital Market

Author

Listed:
  • Din, Shahab-u-Din
  • Javid, Attiya Yasmin

Abstract

This study evaluates the impact family ownership on the firm‟s performance for the period of 2004 to 2009 considering a sample 29 manufacturing firms listed at KSE-100 index in the Pakistani capital market. The dependent variable is performance which is measured by ROA, ROE and Q of the sample firm and the independent variable is family ownership. Linear regression model is used for estimation along correlation analysis. The study reported positive relation between the ownership variable and performance variables. The results indicate negative association between the ownership variable and firm‟s dividend payment concluding that family control firms prefer to retain earning and investment opportunities rather to distribute the earnings. The empirical analysis reveal that the overall better governance practices have positive affect on financial decision. However, the firms with more family ownership do not adopt good practices and disclose less.

Suggested Citation

  • Din, Shahab-u-Din & Javid, Attiya Yasmin, 2011. "Impact of Family Ownership concentration on the Firm’s Performance: Evidence from Pakistani Capital Market," MPRA Paper 37566, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:37566
    as

    Download full text from publisher

    File URL: https://mpra.ub.uni-muenchen.de/37566/1/MPRA_paper_37566.pdf
    File Function: original version
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Agrawal, Anup & Mandelker, Gershon N., 1990. "Large Shareholders and the Monitoring of Managers: The Case of Antitakeover Charter Amendments," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 25(2), pages 143-161, June.
    2. Qi, Daqing & Wu, Woody & Zhang, Hua, 2000. "Shareholding structure and corporate performance of partially privatized firms: Evidence from listed Chinese companies," Pacific-Basin Finance Journal, Elsevier, vol. 8(5), pages 587-610, October.
    3. Jayesh Kumar, 2004. "Does Ownership Structure Influence Firm Value? Evidence from India," Finance 0406008, University Library of Munich, Germany.
    4. Demsetz, Harold & Villalonga, Belen, 2001. "Ownership structure and corporate performance," Journal of Corporate Finance, Elsevier, vol. 7(3), pages 209-233, September.
    5. Michael S. Rozeff, 1982. "Growth, Beta And Agency Costs As Determinants Of Dividend Payout Ratios," Journal of Financial Research, Southern Finance Association;Southwestern Finance Association, vol. 5(3), pages 249-259, September.
    6. Cubbin, John S & Leech, Dennis, 1983. "The Effect of Shareholding Dispersion on the Degree of Control in British Companies: Theory and Measurement," Economic Journal, Royal Economic Society, vol. 93(37), pages 351-369, June.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Naeem Tabassum & Satwinder Singh, 2020. "Corporate Governance and Organisational Performance," Springer Books, Springer, number 978-3-030-48527-6, June.
    2. Wang, Kun Tracy & Shailer, Greg, 2017. "Family ownership and financial performance relations in emerging markets," International Review of Economics & Finance, Elsevier, vol. 51(C), pages 82-98.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Din, Shahab-u- & Javid, Attiya Yasmin, 2011. "Impact of managerial ownership on financial policies and the firm’s performance: evidence Pakistani manufacturing firms," MPRA Paper 37560, University Library of Munich, Germany.
    2. Yeddou, Nacera & Pourroy, Marc, 2020. "Bank liquidity creation: Does ownership structure matter?," The Quarterly Review of Economics and Finance, Elsevier, vol. 78(C), pages 116-131.
    3. Thomsen, Steen & Pedersen, Torben & Kvist, Hans Kurt, 2006. "Blockholder ownership: Effects on firm value in market and control based governance systems," Journal of Corporate Finance, Elsevier, vol. 12(2), pages 246-269, January.
    4. Jayesh Kumar, 2006. "Corporate Governance and Dividends Payout in India," Journal of Emerging Market Finance, Institute for Financial Management and Research, vol. 5(1), pages 15-58, April.
    5. repec:eme:arjpps:arj-09-2017-0149 is not listed on IDEAS
    6. Yeh, Tsung-ming, 2017. "Determinants and consequences of shareholder proposals: The cases of board election, charter amendment, and profit disposal," Journal of Corporate Finance, Elsevier, vol. 45(C), pages 245-261.
    7. Ahmed Aboud & Ahmed Diab, 2022. "Ownership Characteristics and Financial Performance: Evidence from Chinese Split-Share Structure Reform," Sustainability, MDPI, vol. 14(12), pages 1-18, June.
    8. Taylan Mavruk & Conny Overland & Stefan Sjögren, 2020. "Keeping it real or keeping it simple? Ownership concentration measures compared," European Financial Management, European Financial Management Association, vol. 26(4), pages 958-1005, September.
    9. Trien Le & Amon Chizema, 2011. "State ownership and firm performance: Evidence from the Chinese listed firms," Organizations and Markets in Emerging Economies, Faculty of Economics, Vilnius University, vol. 2(2).
    10. Kurt Hess & Abeyratna Gunasekarage & Martin Hovey, 2010. "State‐dominant and non‐state‐dominant ownership concentration and firm performance," International Journal of Managerial Finance, Emerald Group Publishing Limited, vol. 6(4), pages 264-289, September.
    11. Krishna Dayal Pandey & Tarak Nath Sahu, 2021. "Ownership Concentration and Agency Crises in Indian Manufacturing Firms," Business Perspectives and Research, , vol. 9(1), pages 128-143, January.
    12. Strickland, Deon & Wiles, Kenneth W. & Zenner, Marc, 1996. "A requiem for the USA Is small shareholder monitoring effective?," Journal of Financial Economics, Elsevier, vol. 40(2), pages 319-338, February.
    13. Pombo, Carlos & De la hoz, María Camila, 2015. "Institutional Investors and Firm Valuation: Evidence from Latin America," Galeras. Working Papers Series 040, Universidad de Los Andes. Facultad de Administración. School of Management.
    14. Yasser, Qaiser Rafique & Mamun, Abdullah Al, 2014. "Implications of Ownership Identity and Insider's Supermacy on the Economic Performance of the Liste Companies," MPRA Paper 61426, University Library of Munich, Germany.
    15. Anthonia T. Odeleye, 2018. "Quality of Corporate Governance on Dividend Payouts: The Case of Nigeria," African Development Review, African Development Bank, vol. 30(1), pages 19-32, March.
    16. Rossi, Fabrizio & Barth, James R. & Cebula, Richard J., 2018. "Do shareholder coalitions affect agency costs? Evidence from Italian-listed companies," Research in International Business and Finance, Elsevier, vol. 46(C), pages 181-200.
    17. Eyup Kadioglu & Saim Kilic & Ender Aykut Yilmaz, 2017. "Testing the Relationship between Free Cash Flow and Company Performance in Borsa Istanbul," International Business Research, Canadian Center of Science and Education, vol. 10(5), pages 148-158, May.
    18. Črt Kostevc, 2022. "Ownership structure and firm export performance: evidence from Slovenian microdata," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 49(1), pages 155-187, February.
    19. Amitava Roy, 2014. "Corporate Governance and Firm Performance: An Exploratory Analysis of Indian Listed Companies," Jindal Journal of Business Research, , vol. 3(1-2), pages 93-120, June.
    20. Lukas Setia‐Atmaja & George A. Tanewski & Michael Skully, 2009. "The Role of Dividends, Debt and Board Structure in the Governance of Family Controlled Firms," Journal of Business Finance & Accounting, Wiley Blackwell, vol. 36(7‐8), pages 863-898, September.
    21. Khine Kyaw & Steen Thomsen & Sirimon Treepongkaruna, 2022. "Firms' potential for economic sustainability and firm value: The moderating role of blockholders," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(5), pages 884-901, October.

    More about this item

    Keywords

    Family ownership; Return on Asset; Return on Equity; Tobin‟s Q; agency theory; entrenchment theory;
    All these keywords.

    JEL classification:

    • A1 - General Economics and Teaching - - General Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:37566. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joachim Winter (email available below). General contact details of provider: https://edirc.repec.org/data/vfmunde.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.