Concentrated Promoters’ Ownership and Firm Value: Re-examining the Monitoring and Expropriation Hypothesis

Vision: The Journal of Business Perspective

2019

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This empirical investigation attempts to enquire into the relationship among debt financing, agency cost and performance of Indian manufacturing firms. The study tries to document the impact of debt financing on firm performance in two different phases of panel data estimations. In the first phase, the study enquires the effect of debt on firms’ profitability measured by ‘return on equity’. The second phase tries to empirically explain the reason behind such impact by introducing agency cost. Considering the manufacturing firms traded in the BSE 200 Index from 2009–2016, the study documents a significant and negative effect of debt on firm performance. The magnitude of debt is also found to be positively affecting the agency cost measured by ‘general and administrative expenses’. So the negative effect of debt on firm performance is reinforced and justified as debt is also found to elevate the agency costs for the firms.

Section: Discussionmentioning

confidence: 99%

Debt Financing, Agency Cost and Firm Performance: Evidence from India

Pandey

Vision: The Journal of Business Perspective

2019

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“…The age of the company is taken as the number of years of operation since its inception. A large number of empirical studies such as Saxena and Kohli (2012), Khan et al (2013), Sahu and Manna (2013), Dienes et al (2016), Pandey and Sahu (2019a) have justified a very strong connection between the age of the firm and its level of efficiency, disclosures and performance with strong theoretical and empirical reasons.…”

Section: Methodsmentioning

confidence: 99%

Corporate Governance, Firms’ Characteristics and Environmental Performance Disclosure Practices of Indian Companies

Pareek

Pandey

Indian Journal of Corporate Governance

2019

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This study attempts to explore the effect of corporate governance parameters like board size and independent directors along with firm-specific characteristics such as age, size and profitability on the environmental performance disclosure of 38 National Stock Exchange (NSE) listed Indian non-financial companies for the period of 2013–2017. This study uses panel data analysis and finally documents a positive impact of board size and age of firm on the environmental performance disclosures of Indian companies. The study also finds a significant and negative effect of board independence on the environmental performance disclosure of such companies. The study based on its findings questions the role of independent directors as an internal regulatory body and suggests external regulatory specifications for better environmental performance and its disclosure to the public.

“…To control the other possible determinants of CSR performance not captured by the independent variables, certain firm characteristics such as board size (BS), size of the firm (FS), debt-equity ratio, current ratio (CR) and profitability (TQ) is included as control variables in the study (Kumar and Singh, 2013;Pandey and Sahu, 2017;Pandey and Sahu, 2019).…”

Section: Control Variablesmentioning

confidence: 99%

How far the ownership structure is relevant for CSR performance? An empirical investigation

Pareek

2021

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Purpose Taking hints from the lacunas in the field of ownership structure and corporate social responsibility (CSR) performance of the firms in India, especially when the moderating effect of certain corporate governance mechanism comes into play, this study aims to attempt to fulfill the gap by exploring the ownership structure of the firm (i.e. foreign ownership, institutional ownership and government ownership) and the CSR performance of the firm, when moderated by board independence of the firm. In an additional analysis, the study explores the non-linear effect of foreign ownership structure on the CSR performance in the Indian context. Design/methodology/approach The study incorporates a strongly balanced panel data set of 280 non-financial National Stock Exchange 500 listed firms for the study period of 2013–2019. The study uses both static and Arellano–Bond dynamic panel model under generalized method of moments (GMMs) framework to establish the relationship between the studied variables. Findings The study acknowledges a positive impact of the foreign investors in the CSR performance of Indian firms with a higher proportion of independent directors on the board. The study further finds a contrarian role of government ownership in Indian context among the sampled firms. The study also in its extended analysis finds a non-linear inverted U-shaped relationship between foreign ownership (FO) and the CSR performance, which shows that FO positively impacts the CSR performance until a threshold level of 34% after which the curve starts declining. Practical implications One of the major implications this study provides for the corporate policymakers is that the firms with a string penchant for philanthropic activities such as CSR should be concerned with attracting more foreign investors in their shareholding. Also, a higher proportion of independent directors on the board boost the engagement of the firm in CSR works. Originality/value The moderating effect of board independence in the ownership structure–CSR relationship attempted by this study is a rare attempt in a developing economy, such as India, and offers a fresh dimension to the study. Also, the non-linearity relationship between FO and the CSR performance and the threshold level providing the twofold effect of the variables is an innovative research attempt, especially in regard to a developing country like India.