Managerial ownership and performance: A commentary essay

Florackis, Kostakis, and Ozkan [Florackis, C., Kostakis, A., and Ozkan, A., 2008. Managerial ownership and performance, Journal of Business Research, forthcoming] empirically examine the exact nature of the relationship between managerial ownership and corporate performance in the framework of semi-parametric regression. This commentary explores the authors' contribution to the corporate governance literature in the light of recent advances in semi-parametric regression. The commentary also considers how Florackis et al.'s findings align with important, emerging work in the corporate governance literature.     

Managerial ownership,diversification, and firm performance: Evidence from an emerging market

Numerous existing studies have explored the impact of corporate diversification on firm performance, whereas considerably less research has investigated the inter-relationships among managerial ownership, diversification, and firm performance. This paper develops several hypotheses based on the agency theory self-interest perspective and tests the relationships among managerial ownership, corporate diversification, and firm performance using a sample of 98 emerging market firms listed on the Taiwan Stock Exchange. The results show a U-shaped relationship between managerial ownership and corporate diversification, similar to that found in prior studies. However, the inflection point is 33.17%, which is lower than that found in previous studies. Moreover, in contrast to prior results, corporate diversification is found to be positively associated with short-term firm performance and bears no relationship with mid-term firm performance, while firms engaged in unrelated diversification outperform those engaged in related diversification. This paper concludes with theoretical implications and suggestions for future research.     

基于生产要素密集度的高管人员报酬激励与公司绩效研究

本文研究了不同要素密集产业上市公司高管报酬激励与公司绩效的关系。实证结果表明,在不同的要素密集产业类型中,高管报酬激励对公司绩效影响不同。在劳动密集型公司中,高管持股比例和高管年度收入与公司绩效呈显著正相关关系。而在技术密集型公司和资本密集型公司中,高管报酬激励变量与公司绩效不存在显著相关关系。另外,研究还发现国有终极产权不利于公司绩效的改善,对公司绩效有负面影响。     

Corporate Governance and Corporate Social Responsibility Disclosures: Evidence from an Emerging Economy

We examine the relationship between corporate governance and the extent of corporate social responsibility (CSR) disclosures in the annual reports of Bangladeshi companies. A legitimacy theory framework is adopted to understand the extent to which corporate governance characteristics, such as managerial ownership, public ownership, foreign ownership, board independence, CEO duality and presence of audit committee influence organisational response to various stakeholder groups. Our results suggest that although CSR disclosures generally have a negative association with managerial ownership, such relationship becomes significant and positive for export-oriented industries. We also find public ownership, foreign ownership, board independence and presence of audit committee to have positive significant impacts on CSR disclosures. However, we fail to find any significant impact of CEO duality. Thus, our results suggest that pressures exerted by external stakeholder groups and corporate governance mechanisms involving independent outsiders may allay some concerns relating to family influence on CSR disclosure practices. Overall, our study implies that corporate governance attributes play a vital role in ensuring organisational legitimacy through CSR disclosures. The findings of our study should be of interest to regulators and policy makers in countries which share similar corporate ownership and regulatory structures.     

Corporate governance,globalization and firm productivity

We examine the relationship between globalization, corporate governance and firm productivity. The results, using longitudinal data from Korea, indicate that the positive effect of liberalising equity ownership on firms’ total factor productivity (TFP) was reinforced by indirect managerial effects when a firm improved its corporate governance. Our findings also confirm that the interaction of the managerial effect with increased foreign equity ownership is more significant than interaction with exports, suggesting that liberalising foreign investment in the host market is more effective in capitalising on the potential benefits of corporate governance reform than increasing exports to overseas markets, reflected in learning by exporting.     

管理层持股与公司绩效:基于管理层收购的实证研究

以1997至2009年管理层收购进行私有化的66家国有企业作为研究对象,研究管理层持股与公司经营绩效的关系。结果表明:管理层收购对公司绩效的影响在短期存在负向作用的倾向,而在长期内影响并不显著。考虑到管理层持股变化可能对公司绩效产生的影响,进一步分析持股变化率与公司绩效的关系发现,若持股变化率处于+31%~+50%,-31%~-50%,公司业绩指标将呈现正向变化的趋势,从而反映出管理层收购对公司绩效的积极作用。     

高管持股与盈余稳健性:协同效应与堑壕效应

本文研究了高管持股与盈余稳健性的协同效应与堑壕效应。研究发现,上市公司对盈余稳健性的需求与高管持股呈非线性的关系。在高管持股水平较低和较高的区间,高管持股具有协同效应,高管持股与盈余稳健性呈负相关关系;在高管持股的中间水平,高管持股具有堑壕效应,高管持股与盈余稳健性呈正相关关系。     

公司治理与公司网络投资者关系管理的及时性——对中国百强的实证研究

以12个指标评估中国百强公司网络投资者关系管理(IRM)的及时性,通过董事会结构和股权结构两个维度对公司治理与公司网络IRM及时性的关系进行实证检验。研究发现:公司治理机制尤其是股权结构对网络IRM及时性产生了显著影响,高管持股激励机制及国有性质股权有利于提升网络IRM及时性,而第一大股东对网络IRM及时性具有显著的负面影响;中国百强虽均建有网站,但对网络IRM及时性的重视度不足,及时性分值普遍偏低,中国公司的网络IRM活动尚需有效的引导。     

Corporate boards and ownership structure: Evidence from Sub-Saharan Africa

This study examines the relationship between board structure and ownership structure for firms listed on the stock exchanges of twelve Sub-Saharan African countries, using data for the period 2006–2009. We find that ownership concentration, foreign ownership and managerial ownership are negatively associated with board size. We also find that government ownership is positively associated with the proportion of outside directors while ownership concentration is negatively associated with the proportion of outside directors. These results emphasize that board and ownership structure are both corporate governance mechanisms that are used as substitutes to one another in reducing agency problems.     

我国中部地区上市公司治理结构与公司绩效的实证研究

公司治理与公司绩效之间的关系一直是公司治理研究中一个备受争议的课题,实证研究并未得出一致的结论。本文以我国中部地区上市公司为样本,选择董事会规模、独立董事比例、股权集中度等若干研究变量,对董事会结构与股权结构和公司绩效的关系进行实证分析。研究结果发现独立董事比例、机构投资者持股比例、高管人员持股比例和股权集中度与公司绩效存在正相关关系;董事会规模、国有股比例与公司绩效负相关。     

Board Diversity and Managerial Control as Predictors of Corporate Social Performance

While it is widely assumed that greater diversity in corporate governance will enhance a firms corporate social performance, this study considers an alternative thesis which relates managerial control to corporate philanthropy. The study empirically evaluates both board diversity and managerial control of the board as possible predictors of corporate philanthropy. The demonstration of a positive relationship between managerial control and corporate philanthropy contributes to our understanding that corporate social performance results from a complex set of economic and social motives. Possible future research and managerial implications are discussed.     

基于内生性视角的股权结构与公司绩效关系研究

现有股权结构与公司绩效关系的研究,大都不考虑内生性问题,先验地假定股权结构为外生变量.文章以我国1999-2008年沪、深两市370家上市公司为研究对象,发现股权结构是内生的,它与公司绩效之间是一种互动的双向作用关系,即除了股权结构对公司绩效有显著的促进效应外,公司绩效对股权结构也有着强烈的反馈效应,并且这种反馈效应会随着股权结构指标选取的不同而相差明显.     

Capital structure and cost efficiency in the Taiwanese banking industry

By utilizing a sample of 44 Taiwanese banks, this study analyses whether banks can mitigate agency costs, to increase firm performance through optimization of capital structure. The stochastic frontier approach is adopted to determine cost efficiency as the firm performance indicator, an approach that is capable of controlling outside environmental factors. Furthermore, this study uses two-stage least squares to estimate two simultaneous equations that are then used to examine the relationship between capital structure and firm performance. This study includes indicators of ownership structure. The main results are: first, optimal capital structure is selected by the manager to combat the agency problem and thus improve performance, yielding results consistent with agency theory; and second, reducing managerial share ownership will decrease agency cost and increase firm performance, a finding that is consistent with the Entrenchment Hypothesis.     

From Voluntarism to Regulation: A Study on Ownership, Economic Performance and Corporate Environmental Information Disclosure in China

This article examines whether economic performance could affect EID and how the relationship is determined by the form of ownership from voluntarism to regulation under the current Chinese context. In this study, our empirical results show that the relationship between firms’ performance and EID is complex and the interactive impact of ownership and economic performance on EID significantly varies from voluntary disclosure to mandatory disclosure. This study provides a more comprehensive understanding of the motivations in corporate EID. The performance–impression theory can be used to explain the disclosure behaviors during the period of voluntary disclosure, while the pressure–legitimacy theory can be used during the period of mandatory disclosure. The finding suggests that when evaluating corporate EID associated with economic performance in emerging economies such as China, it needs to be cautious, as which tends to vary with the form of ownership and whether there is any mandatory regulation in place.     

Does managerial networking impinge our morality in Guanxi context? The moderating effect of corruption perception

This study explores the relationship between managerial networking and corporate morality in a guanxi context where personal relationship is widely used for organizational purposes. Using a sample of 6361 Chinese private firms, we find a significantly positive relationship between managerial networking and corporate social responsibility, including corporate charitable donations and environmental protection, and an insignificant relationship between managerial networking and the prevalence of business bribery. We also find that such relationships depend on corruption perception, that is, when corruption perception is high, the negative effects of managerial networking are more likely to rise but the positive effects of managerial networking are more likely to be weakened. These results are robust and consistent across various measurements and models.     

Corporate governance and firm performance in emerging markets: Evidence from Turkey

This is a study of the relationship between context, internal corporate governance and firm performance, looking at the case of Turkey, an exemplar of family capitalism. We found more concentrated ownership, often in the hands of families, led to firms performing better; concentrated ownership means that controlling families bear more of the risks of poor performance. Less predictably, given that the institutional environment is so well attuned to family ownership, we found that mechanisms that accord room for a greater range of voices and interests within and beyond families – larger boards and foreign ownership stakes – seem to also make for positive performance effects. We also noted that increase in cross ownership did not influence market performance, but was negatively associated with accounting performance. Conversely, we found that a higher proportion of family members on boards had no discernable effect on performance. Our findings provide further insights on the relationship between the type of institutions encountered in many emerging markets, internal corporate governance configurations and firm performance.     

Heterogeneity in business groups and the corporate diversification-firm performance relationship

This article examines how heterogeneous features among business groups influence the corporate diversification-firm performance relationship. The study classifies heterogeneity along three dimensions: group size, group diversity, and share ownership. Using a sample of firms from India, the study finds some evidence that for firms affiliated to larger business groups, corporate diversification enhances firm performance. However, business group diversity does not influence the diversification-performance relationship. The impact of diversification on firm performance differs substantially owing to the heterogeneity in share ownership. The paper documents an interesting interplay between business group and ownership structure.     

Institutional ownership of stock and dimensions of corporate social performance: An empirical examination

Collectively, institutions own an increasing proportion of outstanding corporate equities. As an emergent force in shaping corporate America, the linkages between institutional ownership and corporate social performance (CSP) require empirical examination. Not only do corporate policy makers need to know those areas where social performance may lure or inhibit capital infusions, lawmakers also need a better understanding of the social forces guiding corporate policy. As anticipated, this study found a positive relationship between the amount of institutional ownership of corporate stock and a company's social responsiveness as measured by the representation of women on its board of directors; however, no statistically significant relationship with social responsibility as measured by charitable giving was found. The exemplar of social issues management — compliance with the Sullivan principles — showed an unexpected, negative relationship with the level of institutional ownership.Betty S. Coffey's research interests are in the area of strategic management, organizational change, and social issues.Gerald E. Fryxell is Assistant Professor of Management at the University of Tennessee, Knoxville. His current research interests are in the area of corporate culture, innovation, and strategic management.     

Small Business Borrowing and the Owner–Manager Agency Costs: Evidence on Finnish Data

This study investigates the impact that managerial ownership has on loan availability and credit terms. We find that managerial ownership is common in a sample of small and medium‐sized Finnish firms. Our results suggest that an increase in managerial ownership decreases loan availability. The results on loan interest rates suggest that though an increase in managerial ownership initially increases interest rates, the effect is reversed at higher levels of ownership. Collateral requirements increase monotonically with managerial ownership. Overall, the results suggest that banks view that there are agency costs involved with managerial ownership even in small and medium‐sized firms and that this is taken into account when lending to these firms.     

Environmental disclosure quality: Evidence on environmental performance,corporate governance and value relevance

This study focuses on common-law Malaysia, which is classified as an advanced emerging market. It assesses the association between environmental disclosure and environmental performance and examines the financial attributes of companies with different environmental disclosure scores. It investigates the relation between environmental disclosure quality and corporate governance, and also examines the extent to which effective environmental disclosures are value relevant and how they influence investor perceptions. The findings of the study show that environmental disclosure is positively linked to environmental performance. Company attributes, such as large size, the need for capital, profitability and capital spending, are positively associated with environmental disclosure quality. High quality environmental disclosers display effective corporate governance and would tend to face less difficulties in accessing capital markets. They generally are audited by a big 4 auditor or cross-listed on foreign stock exchanges and display significant levels of managerial and institutional ownership. High quality environmental disclosures are value relevant and improve investor perceptions. High quality disclosers overall belong to beverages, chemicals, food producers, forestry and paper, and industrial metals and mining.