Does Ownership Structure Affect Firm Performance in an Emerging Market? The Case of India

Panda, Brahmadev; Bag, Dinabandhu

doi:10.22452/ajba.vol12no1.7

Cited by 10 publications

(14 citation statements)

References 75 publications

(135 reference statements)

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“…Based on the study’s controlling variables, promoter ownership, foreign ownership, leverage and age were demonstrated to have a favourable impact on both performance indicators, consistent with previous finding (Verma, Sharma, & Chugh, 2021; Panda & Bag, 2019; Hamdan, 2018; Muttakin, & Khan, 2014; Taufil-Mohd, Md-Rus & Musallam, 2013). On the other hand, this research reveals a detrimental impact of business size on the financial performance of Indian manufacturing firms.…”

Section: Discussionsupporting

confidence: 87%

Relationship among Environmental Performance, R&D Expenditure and Financial Performance: Evidence from Indian Manufacturing Firms

Verma

Sharma

Priyanka

2022

Global Business Review

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The study is conducted to analyse the effect of environmental performance on the financial performance of 67 Indian manufacturing listed companies, categorized into most polluting and least polluting companies for the period of 7 years i.e. from 2014–15 to 2020–21. The present study has employed environmental performance as independent variable measured by various environmental performance measures. The content analysis has been conducted to estimate the environmental performance scores. The study covers both measures of financial performance, i.e. accounting-based measures (Return on Equity) and market-based performance measures (Market to Book value ratio) as dependent variables. The control variables used in the study are ownership structure (promoter ownership, institutional ownership and foreign ownership), firm size, leverage ratio, firm age and sale to asset ratio. By using the feasible generalized least square method, the study found a positive association of environmental performance with financial performance of both categories of companies. In contrast, an adverse effect of research and development expenditure on performance has been observed. The study witnessed the moderating impact of research and development expenditure on the relationship between environmental and financial performance. The study found the mixed effect of ownership structure on the financial performance of manufacturing companies.

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Section: Discussionsupporting

confidence: 87%

Relationship among Environmental Performance, R&D Expenditure and Financial Performance: Evidence from Indian Manufacturing Firms

Verma

Sharma

Priyanka

2022

Global Business Review

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“…This inference is in line with the results obtained by Al-Saidi and Al-Shammari (2015) and Panda and Bag (2019). Though not significant, the negative sign of the coefficient of OC on TQ, EVTA and MCTA supports this interpretation.…”

Section: Impact Of Promoters' Ownershipsupporting

confidence: 91%

“…Second, internal CG mechanisms are not rendered redundant by the market mechanisms, and internal CG indeed has an essential role. This inference supports Panda and Bag (2019). Further, the results negate the belief that internal CG impacts are subject to market conditions and competition in developing economies (Ryu et al , 2017).…”

Section: Discussionsupporting

confidence: 50%

“…Other recent studies in the Indian context affirm the positive impact of promoters' holdings on the firm (Mehrotra et al, 2021;Nazir and Malhotra, 2017;Pandey and Sahu, 2019;Singh et al, 2021). Contrarily, recent studies that found a negative influence of OC on firms include Al-Saidi and Al-Shammari (2015) and Panda and Bag (2019). Al-Saidi and Al-Shammari (2015) examined 103 listed firms in Kuwait and discovered that concentrated ownership could deter FV measured by Tobin's Q.…”

Section: Literaturementioning

confidence: 91%

“…Al-Saidi and Al-Shammari (2015) examined 103 listed firms in Kuwait and discovered that concentrated ownership could deter FV measured by Tobin's Q. In Indian listed firms, it was found that large owners can adversely impact market capitalization (Panda and Bag, 2019). Finally, based on Demsetz and Villalonga (2001), some literature claims that OC and corporate performance are not linked directly.…”

Section: Literaturementioning

confidence: 99%

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Impact of promoters’ ownership and competition on firm’s value: a study of listed SMEs

Singh

Rastogi

2022

JIBR

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Purpose The public listing of small and medium enterprises (SMEs) is a recent phenomenon in India, started in 2012. Such a paradigm shift for SMEs has altered the ownership structure of these firms. In addition, the listing has provided a notable status to SMEs, leading to a shift in exposure to market competition. Literature signifies that these changing dynamics are likely to impact the firm value. This study aims to examine the effects of promoters’ ownership and market competition on the firm value of listed SMEs in India. Ownership concentration (promoters’ ownership) is investigated as the primary proxy for internal governance mechanism, while market competition is investigated as an external form of firm regulation. Design/methodology/approach Three years of panel data from 2018 to 2020 of 80 listed Indian SMEs are used to conduct the analysis. The fixed effects model and cluster robust standard errors captured the detected fixed effects while adjusting for heteroskedasticity and autocorrelation. Besides, moderation analysis is conducted to test if competition regulates the relation between promoters’ ownership and firm value. Findings Promoters’ ownership does not impact the firm value significantly. However, market competition is significant and negatively drives the firm’s value. So, the market competition provides external regulation and coerces the firms to behave well to conserve the firm value. Finally, competition does not regulate the relationship between ownership effects and firm value. Therefore, the study contrasts the belief that the benefits of internal governance (especially promoters’ ownership) for firms in competitive economies are subject to market competition. Originality/value The study establishes the possibility of an integrated approach where internal and external governance mechanisms coexist to drive the firm value and endorses the same. The study is relevant to shareholders, practitioners, lawmakers and academics.

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Corporate governance: Does it matter management of carbon emission performance? An empirical analyses of Indian companies

Goud

2022

Journal of Cleaner Production

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Does Ownership Structure Affect Firm Performance in an Emerging Market? The Case of India

Cited by 10 publications

References 75 publications

Relationship among Environmental Performance, R&D Expenditure and Financial Performance: Evidence from Indian Manufacturing Firms

Relationship among Environmental Performance, R&D Expenditure and Financial Performance: Evidence from Indian Manufacturing Firms

Impact of promoters’ ownership and competition on firm’s value: a study of listed SMEs

Corporate governance: Does it matter management of carbon emission performance? An empirical analyses of Indian companies

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