The Impact of Business Strategy between Corporate Ownership and Investment Efficiency

Abstract

In this study, the effect of firm strategy-prospector and defender-on successful investments in various ownership arrangements is investigated. The non-financial firms listed on the Pakistan Stock Exchange (PSX) between 2011 and 2020 are the subject of this study, which is the first of its kind. The analyses included a generalized least squares (GLS) regression model for data analysis techniques. The findings of the study demonstrate that the prospector approach favourably moderates the link between concentrated ownership, institutional ownership, and managerial ownership, while adversely affecting the correlation between family ownership and investment efficiency. In contrast, the family ownershipinvestment efficiency is favourably moderated by the defender strategy. However, defender business strategies with management ownership are unaffected. Checks, alternate measurements, and model specifications all corroborated these conclusions. To make a new investment and achieve effective business performance, practitioners and investors alike need pay close attention to the research factors.

The Effect of Business Strategy, Managerial Ability, Multiple Large Shareholders, and Earnings Management on Investment Efficiency

“…This ratio reflects the source of capital used by the company to fund its operations. Previous findings suggest that debt to equity ratio significantly affects investment efficiency (Siddique and Rasheed, 2023;Jiang et al, 2018). The formula for calculating debt to equity is as follows.…”