Corporate Governance, Ownership Structure and Performance in Mexico

Abstract

<p>This article studies the relation between ownership structure and performance of 90 Mexican firms for the period 2005-2009. We used a two-stages least squares (2SLS) and generalized method of moments (GMM) because we consider the ownership structure as endogenous, and wish will be the most appropriate given the characteristics of the environment in which the company operates (Shlelifer &amp; Vishny, 1997; La Porta <em>et al.</em>, 2000). The results obtained show a greater performance as to how ownership is concentrated in the Mexican market. This result derives from the institutional framework prevailing in the country where the companies were analyzed. In the Mexican case, the firms with high levels of ownership concentration, especially families, seek a better way to protect their interests. However, this high concentration in families leads to the use of additional governance mechanisms, such as debt or board structure, that have peculiar results (works such as substitutes or reinforcing components).</p

The Association of Board Composition, Intellectual Capital and Firm Performance in a High Ownership Concentration Context: Evidence from Italy

“…As regards the control variable, size of the firm, the results evidence the existence of a positive association between firm size and FP, coherently with Quang and Xin (2014), Alimehmeti and Paletta (2012), Lefort and Urzúa (2008);Reyna et al (2012), Alipour (2013), Kamis et al (2015), Wang (2013);Bodhanowicz andUrbanek (2013), Bodhanowicz (2014), which is consistent with the assumption that large firms can access funds more easily and are able to create entry barriers. The other control variable, leverage, shows a negative and significant relationship with FP, coherently with Titman and Wessels (1988), Rajan and Zingales (1995), Zeitun and Tian (2007), Kapapoulos and Lazaretou (2007), Quang and Xin (2014), and consistently with the pecking order theory, where firms use internally generated funds as the first option to finance projects before resorting to debt.…”

“…The research of Leung et al (2014), based on a sample of Hong Kong firms, finds no significant association of the independence of corporate boards or board committees with firm performance in family firms, whereas board independence is positively associated with firm performance in non-family firms (Note 1). Kouki and Guizani (2015), in their research based on Tunisian firms, find that family ownership negatively moderates the outside directors-FP relationship, and Reyna et al (2012) in their research on the high ownership concentrated context of Mexico find outside directors have a positive association with FP and ownership concentration has an important effect on the board of directors composition.…”

Effects of Family Ownership, Debt and Board Composition on Mexican Firms Performance

“…As in most developing countries, the majority of companies in Mexico are considered family firms [15]. However few studies refer specifically to Mexican family businesses, thus the importance for further investigation [2,15]. As Gedajlovic, Carney, Chrisman, and Kellermanns [6] discuss, it is important to further analyze this phenomenon in emerging countries, where some contextual and institutional factors may fill voids in particular institutional contexts where underdeveloped capital markets and weak corporate legal enforcement prevail.…”

“…It is widely acknowledged that property rights and ownership structure are crucial elements of the firm theory [1,2]. As ownership dispersion has become a feature of the modern corporation, the…”

Solvency Index at Differentiated Levels of Corporate Governance According the Models From Elizabetsky (1976), Kanitz (1978), Matias (1978) and Altman (1979): The Case of the Brazilian Electricity Sector

“…Specifically, according to Talamo (2011), after the scandals of Enron, Vivendi, Cirio, Parmalat and Pan Pharmaceuticals, the debates regarding to the effectiveness of good practices of corporate governance became strong and constant worldwide. In this context, several studies conducted about the financial market have found relationships between the adherence of corporate governance practices and factors such as efficiency, productivity, volatility of shares, asset performance, capital cost, sector indexes and market value (e.g., MALACRIDA; YAMAMOTO, 2006;ALMEIDA;SCALZER;COSTA, 2008;IKENAGA;AZEVEDO;PUTVINSKIS, 2009;SILVA Jr.;JUNQUEIRA;BERTUCCI, 2009;GEOCZE, 2010;SILVA, 2010;MARTINS, 2007MARTINS, , 2011ERKENS;HUNG;MATOS, 2012;GONÇALVES et al, 2012;REYNA;VÁZQUEZ;VALDÉS, 2012;FERREIRA et al, 2013;KIM;LU, 2013;MIURA et al, 2013).…”