Foreign and domestic ownership as the mediator Between investment strategy and company performance (original) (raw)
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Jurnal Analisis Bisnis Ekonomi
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Foreign Ownership and Firm Performance: Evidence from Malaysia
Asian Journal of Accounting and Governance, 2015
It is a known fact that foreign multinational firms hold significant ownership in firms listed on Bursa Malaysia. These foreign owners do not only provide capital, but also managerial expertise and exceptional monitoring mechanism on managers. Therefore, it can be expected that foreign ownership improves firm performance and efficiency. However, the extent to which their participation in ownership could improve firm performance particularly in emerging countries such as Malaysia has to be empirically tested. This study investigates the relationship between foreign ownership and firm performance of public listed firms in Malaysia. Three years panel data of 730 Malaysian public listed firms were examined. The results show that foreign ownership has positive and significant relationship with ROA and Tobin's Q. Therefore, the involvement of foreign investors in monitoring and controlling activities reduces agency conflict in the emerging economy. This is the first study that utilizes the extended agency theory to explain foreign ownership and performance in a developing country.
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Proceedings of the 3rd Asia Pacific International Conference of Management and Business Science (AICMBS 2019), 2020
This study examines the effect of foreign ownership on firm performance using a panel data consisting of 66 non-financial firms listed in the Indonesia Stock Exchange. Five-year period data from 2014 to 2018 is considered. The result of the random effects model indicates that foreign ownership has a positive and significant effect on firm performance; foreign firm ownership is found to have more roles in encouraging performance than what foreign institutional investors can do. This result is consistent with the facts about foreign ownership in Indonesia, where high and stable foreign ownership, in the long run, is beneficial for domestic companies, due to effective monitoring, facilitation of technology usage, international market development, and professional management. The problems in this study is limited due to the fact that the firms being studied, either companies or institutions, are mostly owned by single foreign investors
Does Foreign Ownership Affect Investment Decisions of Manufacturing Companies in Indonesia?
Asian Journal of Applied Sciences, 2018
Premature deindustrialization phenomenon indicated by decreasing manufacturing industry share on the economy faster than expected. Its reflected on the national investment target achievement in the manufacturing sector. This study aims to analiyze the agency problem in investment decision of manufacturing industry in Indonesia by considering foreign ownership. The panel data method used with an annual period from 2007 to 2016 and 100 samples of manufacturing companies listed on the Indonesia Stock Exchange (IDX). This study shows that agency problems occur in indonesian manufacturing companies. Foreign ownership indirectly affects the investment of manufacturing companies reflect better control on management decision.
In this study the relationships between ownership concentration and environmental performance and firm performance are examined. Companies manufacturing and mining sectors are listed in the Indonesia Stock Exchange as the sample in this study. Environmental performance is measured using Performance Rating Program (PROPER) by the Ministry of Environment and Forestry of the Republic Indonesia. Ownership concentration is measured by the percentage ownership of largest shareholders the first three (at least 5 percent) of the outstanding shares. Firm performance is measured by proxy ROA and Tobins Q. The findings indicate that there is no relationship between ownership concentration and environmental performance. Additionally Ownership concentration positively related to firm performance, and environmental performance is positively related to firm performance (in measurement of Tobins Q but not in ROA). The overall findings support agency theory and legitimacy theory. Environmental performance can be a strategy to increase firm performance.
Ownership Structure and Corporate Performance in East Asia
1998
This paper seeks to analyse the relationship between ownership structure and corporate performance for fifty firms listed on the Australian Stock Exchange during 2002-2003. The study initially tests a two equation model similar to that in the existing literature, but is distinguished from prior literature by subsequently reclassifying leverage. By categorising leverage as an endogenous variable, an examination of the relationship between ownership and performance is undertaken through ordinary least squares and two stage least squares analysis of a three equation econometric model. Interestingly, empirical results illustrate the fact that managerial ownership impacts negatively on firm performance which is consistent with the management entrenchment hypothesis.
SSRN Electronic Journal, 2012
This study aims to investigate the effect of capital structure and ownership structure on firm performance. In addition, this study also examines the existence of reverse causality using firm-level data from three industries of three ASEAN countries, i.e., Indonesia, Malaysia and Singapore. It applies a two-stage estimation method. First, we measure the effect of capital structure and ownership structure on firm performance, which is measured using the non-parametric approach of Data Envelopment Analysis (DEA). Second, we test the reverse causality hypothesis of firm performance to capital structure, which is viewed in light of two competing hypotheses: the efficiency-risk hypothesis and franchise-value hypothesis. Findings from this study reveal that, in general, a firm's capital structure positively and significantly affected firm performance, except for the Indonesian firms. In addition, results showed a positive effect of ownership concentration on firm performance. Finally, results from this study support the efficiency-risk hypothesis that suggests a positive relation between firm performance and capital structure.
Jurnal Siasat Bisnis, 2017
This research is aimed to examine moderating role of firms' rank in ASEAN corporate governance scorecard on effect of foreign ownership on firm value in ASEAN. Research sample consists of 491 manufacture firms listed in stock market of Thailand, Singapore, Philippines, Indonesia, and Malaysia from 2012-2013. With regression analysis, this research finds that big 50 of highest ASEAN corporate governance scorecard rank moderates effect of foreign ownership on firm value in ASEAN. High ASEAN corporate governance scorecard; as improvement of rights of shareholders, equitable treatment of shareholders, role of stakeholders, disclosure and transparency, responsibilities of the board; supports foreign shareholder role in firm value increasing. Management could make firm policy about optimal foreign ownership structure as well as optimal corporate governance, so management could maximizes shareholders wealth by firm value increasing. Investors, who have interest send their investment abroad especially in ASEAN, have to see condition of corporate governance, so investors' wealth could be maximized.
The Impact of Foreign Ownership and Management on Firm Performance in Vietnam
The Journal of Asian Finance, Economics and Business
The human and capital resources from foreign investors are important sources of finance for developing countries. Foreign ownership can help the firm to raise funds for operations and the foreign management can help the firm expand the market and improve management. However, does this really happen to Vietnamese firm? To find the answer to that question, this paper examines the impact of foreign ownership and management on the financial performance of listed firms on Vietnam's stock market. The data collected include 427 listed firms in all fields over five years, from 2014 to 2018. The financial performance is measured by Tobin's Q, ROA and ROE. The study carried out testing of each model by the least squares method of Pool OLS, assessing random effects (REM) and evaluating fixed effects (FEM). The most effective model is the FEM model. The results show that the foreign ownership ratio and the size of the firm have a positive impact on the financial performance. The foreign management, the age of the firms, the liquidity and financial leverage have a negative impact on the financial performance. Based on the research results, the study proposes some recommendations to improve the financial performance of listed firms in Vietnam.
Does Green Investment Increase Financial Performance? Empirical Evidence from Indonesian Companies
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The negative effects of globalization and rapid growth of industries on environment have changed the business paradigm from profit issues to profit, people and planet (triple bottom line). Consequently, a number of companies have invested their money in environmental issues (called as green investment). This study aims to investigate the effect of firm characteristics on green investment and how green investment influences financial performance. Using annual reports of companies receiving the Program for Pollution Control, Evaluation and Rating (PROPER) award and listed on the Indonesia Stock Exchanges in the year of 2009-2014 as research data, the findings showed that firm size, foreign ownership, industry profile, and frequency of audit committee meeting significantly influenced green investment whereas ISO14001 management certification had no effect on it. Interestingly, green investment positively determined an increase in firm financial performance. This reveals that the better...