Business Commons^™

Migrant Remittances, Financial Sector Development And The Government Ownership Of Banks: Evidence From A Group Of Non-Oecd Economies, Arusha Cooray

Faculty of Commerce - Papers (Archive)

This study investigates the influence of migrant remittances on two dimensions of the financial sector, namely, size and efficiency in a sample of 94 non-OECD economies. Evidence suggests that migrant remittances contribute to increasing the size and efficiency of the financial sector. The study, in addition, examines the impact of remittances on financial sector size and efficiency through their interaction with the government ownership of banks. The results suggest that remittances lead to larger increases in financial sector size in countries in which the government ownership of banks is lower, and increases in efficiency in countries in which the government …

The Effect Of Ownership Structure On Leverage Decision: New Evidence From Chinese Listed Firms, Qigui Liu, Gary Tian, Xiaoming Wang

Faculty of Commerce - Papers (Archive)

This paper examines the effect of state control and ownership structure on the leverage decision of firms listed in the Chinese stock market. Our results show that state-owned enterprises (SOEs) have higher leverage ratios than non-SOEs, and SOEs in regions with a poorer institutional environment have higher leverage ratios than SOEs in better regions. We also show that the largest shareholding (the percentage of shares held by the largest shareholder) in the SOEs has a negative relationship with the leverage ratio, while the largest shareholding in non-SOEs has a non-linear relationship with the short-term and long-term debt ratios. Finally, this …

Disproportional Ownership Structure And Pay–Performance Relationship: Evidence From China's Listed Firms, Jerry Cao, Xiaofei Pan, Gary Tian

Faculty of Commerce - Papers (Archive)

This paper examines the impact of ownership structure on executive compensation in China's listed firms. We find that the cash flow rights of ultimate controlling shareholders have a positive effect on the pay–performance relationship, while a divergence between control rights and cash flow rights has a significantly negative effect on the pay–performance relationship. We divide our sample based on ultimate controlling shareholders' type into state owned enterprises (SOE), state assets management bureaus (SAMB), and privately controlled firms. We find that in SOE controlled firms cash flow rights have a significant impact on accounting based pay–performance relationship. In privately controlled firms, …

Migrant Remittances, Financial Sector Development And The Government Ownership Of Banks, Arusha V. Cooray

Faculty of Commerce - Papers (Archive)

This study investigates the influence of migrant remittances on twodimensions of the financial sector, namely, size and efficiency. Evidence suggests thatmigrant remittances contribute to increasing the size and efficiency of the financialsector. The study, in addition, examines the impact of remittances on financial sectorsize and efficiency through the government ownership of banks channel. While theresults suggest that remittances lead to larger increases in financial sector size incountries in which the government ownership of banks is lower and increases inefficiency in countries in which the government ownership of banks is higher, thegovernment is found to play an important role in promoting …

How Does The Separation Of Ownership And Control Affect Corporate Performance: The Impact Of Earnings Management In China, Yuqing Zhu, Gary G. Tian, Shan Zhao

Faculty of Commerce - Papers (Archive)

This paper examines the impact of disproportional ownership on true firm performance when firm performance is adjusted for the effect of earnings management. Results from regression analysis indicate that the separation between control and cash flow rights of family/or individual-controlled listed firms in China decreases firm performance when firm performance is adjusted for the effect of earnings management than when firm performance is measured as reported performance. The results also show that separation is significantly positively related with true firm performance in firms with low cash flow rights concentration. The main disproportional ownership mechanism, pyramidal structures is also investigated in …

Political Connections, Founding Family Ownership And Leverage Decision Of Privately Owned Firms, Qigui Liu, Gary G. Tian

Faculty of Commerce - Papers (Archive)

In this paper, we examine the effect of political connections versus founding family ownership on the relationship between disproportional ownership structure and leverage decisions of privately owned firms listed in Chinese market. We find that disproportional ownership has positive effect on leverage, indicating that controlling shareholder tends to use both disproportional ownership structure and debt to expropriate. We also find that the interacted term between disproportional ownership and political connections has a positive impact on leverage ratio, and disproportional ownership structure is negatively related with leverage ratio of founding-family controlled firms, which indicate a substitute effect between political connections and …

Disproportional Ownership Structure And Pay-Performance Relationship: Evidence From China's Listed Firms, Jerry Cao, Xiaofei Pan, Gary G. Tian

Faculty of Commerce - Papers (Archive)

This paper examines the impact of disproportional ownership structure on the pay-performance relationship in China’s listed firms. We find that the cash flow rights of the ultimate controlling shareholder have a positive effect on this relationship while a divergence between the control rights and cash flow rights has a significantly negative effect. By dividing our sample into state owned enterprises (SOE), state assets management bureaus (SAMB), and privately controlled firms, we find that cash flow rights in SOE controlled firms have a significant impact on accounting based pay performance and cash flow rights in privately controlled firms also affect the …

Performance Implication Of Ownership Structure And Ownership Concentration: Evidence From Sri Lankan Firms, Athula S. Manawaduge, Anura De Zoysa, Kathleen M. Rudkin

Faculty of Commerce - Papers (Archive)

Purpose - This paper seeks to examine the impact of ownership concentration and ownership structure on firms’ performance of a sample of public listed companies in Sri Lanka in the premise of an agency theory framework.

Design/methodology/approach - The paper first investigates the nature of ownership structure and concentration and then examines whether there is strong evidence to support the observation that the variations of ownership structure across firms result in systematic variations in firm performance. This hypothesis is tested by assessing the impact of ownership structure and concentration on firm performance measured in terms of accounting profitability and market …

Board Composition, Board Activity And Ownership Concentration, The Impact On Firm Performance, Shiguang Ma, Gary Tian

Faculty of Commerce - Papers (Archive)

This paper provides a parallel investigation on the impact of board composition, board activity and ownership concentration on the performance of listed Chinese firms. We find that independent directors enhance firm performance effectively than other board factors. The frequency of shareholder meetings, rather than board meetings, is positively associated with firm value. Tradable share ownership concentration has a positive and linear relationship with firm value, while state and total share ownership concentration represent U(V) shapes. Importantly, companies with the highest levels of both total share and tradable share ownership concentration have a greater firm values than companies with the highest …

Managerial Ownership, Capital Structure And Firm Value, Wenjuan Ruan, Gary G. Tian, Shiguang Ma

Faculty of Commerce - Papers (Archive)

This paper extends prior research to examine the managerial ownership influences on firm performance through the choices of capital structures by using a new sample of S&P 500 firm in 2005. The empirical results of OLS regressions replicate the nonlinear relationship between managerial ownership and firm value. However, we found that the turning points had moved up in our sample compared with previous papers, which implies that the managerial control for pursuing self-interest, and the alignment of interests between managers and other shareholders can only be achieved now by management holding more ownership in a firm than that found in …

Managerial Compensation, Ownership Structure And Firm Performance In China's Listed Firms, Xiaofei Pan, Gary G. Tian, Shiguang Ma, Aelee Jun, Qingliang Tang

Faculty of Commerce - Papers (Archive)

This paper investigates managerial compensation and its relationship with firm performance in China's listed firms. In China, the largest shareholder dominates other shareholders, controls the firm and therefore exercises substantial impacts on manager compensation. After controlling for other firm and industry characteristics, we find that manager remuneration is greater and pay-performance relation is stronger for privately-controlled firms than for state-controlled firms. We also document that state-controlled firms exercise performance-based manager incentive schemes, which is contrary to evidence found in some earlier studies. Our results also indicate that top executives in firms with a foreign ownership are more highly compensated, relative …

Does Ownership Affect A Firm's Performance And Default Risk In Jordan?, Rami Zeitun, Gary Gang Tian

Faculty of Commerce - Papers (Archive)

Purpose – This paper seeks to examine the impact of ownership structure on firm performance and the default risk of a sample of publicly listed firms.

Design/methodology/approach – This paper examines the impact of ownership structure on firm performance and the default risk of a sample of 59 publicly listed firms in Jordan from 1989 to 2002.

Findings – The main findings were: ownership structure has significant effects on the accounting measure of performance return on assets (ROE); government shares are significantly negatively related to the firm's performance ROE; defaulted firms have a high concentration ownership compared with non-defaulted firms …