The cubic nonlinear impact of managerial ownership on firm performance of vietnamese companies listed on Ho Chi Minh City stock exchange
Main Article Content
Abstract
This study examined the impact of managerial ownership structure on firm performance of listed companies on Hochiminh City Stock Exchange. Firm performance was measured by return on equity (ROE) and Tobin's Q. In this study, the data of 332 companies listed on the Hochiminh City Stock Exchange with the System-GMM method was used. The results showed a cubic nonlinear impact between managerial ownership on firm performance, implying that the “convergence of interests” and “entrenchment” hypotheses of managers’ behavior can explain the cubic nonlinear relationship of managerial ownership on firm performance. In addition, base on results, this study also gave recommendations on managerial ownership structure to optimal firm performance and stakeholders’ interests.
Article Details
Keywords
Ownership stucture, Managerial ownership, Firm performance
References
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Alabdullah, T. T. Y., Yahya, S., & Ramayah, T. (2014). Corporate Governance Mechanisms and Jordanian Companies’ Financial Performance. Asian Social Science, 10(22), 247 – 262.
Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The review of economic studies, 58(2), 277-297.
Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of econometrics, 68(1), 29-51.
Arora, A., & Sharma, C. (2016). Corporate governance and firm performance in developingcountries: evidence from India. Corporate Governance (Bingley), 16(2), 420 – 436.
Balsmeier, B., & Czarnitzki, D. (2017). Ownership concentration, institutional development and firm performance in Central and Eastern Europe. Managerial and Decision Economics, 38(2), 178-192.
Berle, A. A., & Means, G. C. (1932). The modern corporation and private property. New Brunswick. NJ: Transaction.
Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of econometrics, 87(1), 115-143.
Dakhlallh, M. M., Rashid, N. M. M., Abdullah, W. A. W., & Dakhlallh, A. M. (2019). The Moderating Effect of the CEO Duality towards the Influence of the Ownership Structure on the Firm Performance among Jordanian Public Shareholders Companies. International Journal of Academic Research in Progressive Education and Development, 8(3), 32-49.
Demsetz, H., & Villalonga, B. (2001). Ownership structure and corporate performance. Journal of corporate finance, 7(3), 209-233.
De Miguel, A., Pindado, J., & De La Torre, C. (2004). Ownership structure and firm value: New evidence from Spain. Strategic Management Journal, 25(12), 1199-1207.
Dwivedi, N., & Jain, A. K. (2005). Corporate governance and performance of Indian firms: The effect of board size and ownership. Employee Responsibilities and Rights Journal, 17(3), 161-172.
Fama, E. F. (1980). Agency problems and the theory of the firm. Journal of political economy, 88(2), 288-307.
Fauzi, F., & Locke, S. (2012). Board Structure, Ownership Structure and Firm Performance: A Study of New Zealand Listed-Firms. Asian Academy of Management Journal of Accounting and Finance (AAMJAF), 8(2), 43-67.
Hansen, L. P. (1982). Large Sample Properties of Generalized Method of Moments Estimators. Econometrica, 50(4), 1029-1054.
Heugens, P.P.M.A.R., Van Essen, M. and Van Oosterhout, J. (2009). “Meta-analyzing ownership concentration and firm performance in Asia: towards a more fine-grained understanding”. Asia Pacific Journal of Management, 26(3), 481-512.
Hoang, L. T., Nguyen, C. C., & Hu, B. (2017). Ownership structure and firm performance improvement: Does it matter in the vietnamese stock market?. Economic Papers: A journal of applied economics and policy, 36(4), 416-428.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of financial economics, 3(4), 305-360.
Himmelberg, C. P., Hubbard, R. G., & Palia, D. (1999). Understanding the determinants of managerial ownership and the link between ownership and performance. Journal of financial economics, 53(3), 353-384.
Holtz-Eakin, D., Newey, W., & Rosen, H. S. (1988). Estimating vector autoregressions with panel data. Econometrica: Journal of the econometric society, 56(6), 1371-1395
Khamis, R., Elali, W., & Hamdan, A. (2015). Ownership structure and corporate financial performance in Bahrain bourse. Corporate Ownership and Control, 13(1), 419–434.
Kumar, N., & Singh, J. P. (2013). Effect of board size and promoter ownership on firm value: some empirical findings from India. Corporate Governance: International Journal of Business in Society, 13(1), 88-98.
Li, D., Moshirian, F., Nguyen, P., & Tan, L. W. (2007). Managerial ownership and firm performance: Evidence from China's privatizations. Research in International Business and Finance, 21(3), 396-413.
Martínez-Sola, C., García-Teruel, P. J., & Martínez-Solano, P. (2013). Corporate cash holding and firm value. Applied Economics, 45(2), 161-170.
Mohammed, A. M. (2018). The impact of ownership structure on firm performance: evidence from Jordan. Academy of Accounting and Financial Studies Journal, 22(5), 1-9.
McConnell, J. J., & Servaes, H. (1990). Additional evidence on equity ownership and corporate value. Journal of Financial economics, 27(2), 595-612.
Morck, R., Shleifer, A., & Vishny, R. W. (1988). Management ownership and market valuation: An empirical analysis. Journal of financial economics, 20, 293-315.
Ngô Mỹ Trân và Lê Thị Trang (2018). Mức độ tập trung vốn và hiệu quả hoạt động của các công ty niêm yết trên sở giao dịch chứng khoán Thành phố Hồ Chí Minh. Tạp chí Khoa học Trường Đại học Cần Thơ, 54(7), 138-145.
Nguyen, T., Locke, S., & Reddy, K. (2015). Ownership concentration and corporate performance from a dynamic perspective: Does national governance quality matter?. International Review of Financial Analysis, 41, 148-161.
Palia, D., & Lichtenberg, F. (1999). Managerial ownership and firm performance: A re-examination using productivity measurement. Journal of Corporate Finance, 5(4), 323-339.
Ruan, W., Tian, G., & Ma, S. (2011). Managerial ownership, capital structure and firm value: Evidence from China’s civilian-run firms. Australasian Accounting, Business and Finance Journal, 5(3), 73-92.
Selarka, E. (2005). Ownership concentration and firm value: a study from the Indian corporate sector. Emerging Markets Finance and Trade, 41(6), 83-108.
Shleifer, A., & Vishny, R. W. (1989). Management entrenchment: The case of manager-specific investments. Journal of financial economics, 25(1), 123-139.
Trần Minh Trí và Dương Như Hùng (2011). Ảnh hưởng của tỉ lệ sở hữu quản trị đến hiệu quả kinh doanh của các công ty niêm yết trên sàn Sở giao dịch chứng khoán Thành phố Hồ Chí Minh. Tạp chí phát triển KH&CN, 14(02), 116-124.
Phan Bùi Gia Thủy, Trần Đức Tài và Trần Thị Tú Anh. (2017). Ảnh hưởng của đặc điểm tổng giám đốc điều hành đến hiệu quả kinh doanh doanh nghiệp. Tạp chí Khoa học Đại học Mở TP. Hồ Chí Minh, 12(2), 205-217.
Vo, D., & Phan, T. (2013). Corporate governance and firm performance: Empirical evidence from Vietnam. Journal of Economic Development, 7(1), 62-78.
Zraiq, M. A. A., & Fadzil, F. H. B. (2018). The impact of ownership structure on firm performance: Evidence from Jordan. International Journal of Accounting, Finance and Risk Management, 3(1), 1-4.
Alabdullah, T. T. Y. (2018). The relationship between ownership structure and firm financialperformance: Evidence from Jordan. Benchmarking, 25(1), 319 – 333.
Alabdullah, T. T. Y., Yahya, S., & Ramayah, T. (2014). Corporate Governance Mechanisms and Jordanian Companies’ Financial Performance. Asian Social Science, 10(22), 247 – 262.
Arellano, M., & Bond, S. (1991). Some tests of specification for panel data: Monte Carlo evidence and an application to employment equations. The review of economic studies, 58(2), 277-297.
Arellano, M., & Bover, O. (1995). Another look at the instrumental variable estimation of error-components models. Journal of econometrics, 68(1), 29-51.
Arora, A., & Sharma, C. (2016). Corporate governance and firm performance in developingcountries: evidence from India. Corporate Governance (Bingley), 16(2), 420 – 436.
Balsmeier, B., & Czarnitzki, D. (2017). Ownership concentration, institutional development and firm performance in Central and Eastern Europe. Managerial and Decision Economics, 38(2), 178-192.
Berle, A. A., & Means, G. C. (1932). The modern corporation and private property. New Brunswick. NJ: Transaction.
Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of econometrics, 87(1), 115-143.
Dakhlallh, M. M., Rashid, N. M. M., Abdullah, W. A. W., & Dakhlallh, A. M. (2019). The Moderating Effect of the CEO Duality towards the Influence of the Ownership Structure on the Firm Performance among Jordanian Public Shareholders Companies. International Journal of Academic Research in Progressive Education and Development, 8(3), 32-49.
Demsetz, H., & Villalonga, B. (2001). Ownership structure and corporate performance. Journal of corporate finance, 7(3), 209-233.
De Miguel, A., Pindado, J., & De La Torre, C. (2004). Ownership structure and firm value: New evidence from Spain. Strategic Management Journal, 25(12), 1199-1207.
Dwivedi, N., & Jain, A. K. (2005). Corporate governance and performance of Indian firms: The effect of board size and ownership. Employee Responsibilities and Rights Journal, 17(3), 161-172.
Fama, E. F. (1980). Agency problems and the theory of the firm. Journal of political economy, 88(2), 288-307.
Fauzi, F., & Locke, S. (2012). Board Structure, Ownership Structure and Firm Performance: A Study of New Zealand Listed-Firms. Asian Academy of Management Journal of Accounting and Finance (AAMJAF), 8(2), 43-67.
Hansen, L. P. (1982). Large Sample Properties of Generalized Method of Moments Estimators. Econometrica, 50(4), 1029-1054.
Heugens, P.P.M.A.R., Van Essen, M. and Van Oosterhout, J. (2009). “Meta-analyzing ownership concentration and firm performance in Asia: towards a more fine-grained understanding”. Asia Pacific Journal of Management, 26(3), 481-512.
Hoang, L. T., Nguyen, C. C., & Hu, B. (2017). Ownership structure and firm performance improvement: Does it matter in the vietnamese stock market?. Economic Papers: A journal of applied economics and policy, 36(4), 416-428.
Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of financial economics, 3(4), 305-360.
Himmelberg, C. P., Hubbard, R. G., & Palia, D. (1999). Understanding the determinants of managerial ownership and the link between ownership and performance. Journal of financial economics, 53(3), 353-384.
Holtz-Eakin, D., Newey, W., & Rosen, H. S. (1988). Estimating vector autoregressions with panel data. Econometrica: Journal of the econometric society, 56(6), 1371-1395
Khamis, R., Elali, W., & Hamdan, A. (2015). Ownership structure and corporate financial performance in Bahrain bourse. Corporate Ownership and Control, 13(1), 419–434.
Kumar, N., & Singh, J. P. (2013). Effect of board size and promoter ownership on firm value: some empirical findings from India. Corporate Governance: International Journal of Business in Society, 13(1), 88-98.
Li, D., Moshirian, F., Nguyen, P., & Tan, L. W. (2007). Managerial ownership and firm performance: Evidence from China's privatizations. Research in International Business and Finance, 21(3), 396-413.
Martínez-Sola, C., García-Teruel, P. J., & Martínez-Solano, P. (2013). Corporate cash holding and firm value. Applied Economics, 45(2), 161-170.
Mohammed, A. M. (2018). The impact of ownership structure on firm performance: evidence from Jordan. Academy of Accounting and Financial Studies Journal, 22(5), 1-9.
McConnell, J. J., & Servaes, H. (1990). Additional evidence on equity ownership and corporate value. Journal of Financial economics, 27(2), 595-612.
Morck, R., Shleifer, A., & Vishny, R. W. (1988). Management ownership and market valuation: An empirical analysis. Journal of financial economics, 20, 293-315.
Ngô Mỹ Trân và Lê Thị Trang (2018). Mức độ tập trung vốn và hiệu quả hoạt động của các công ty niêm yết trên sở giao dịch chứng khoán Thành phố Hồ Chí Minh. Tạp chí Khoa học Trường Đại học Cần Thơ, 54(7), 138-145.
Nguyen, T., Locke, S., & Reddy, K. (2015). Ownership concentration and corporate performance from a dynamic perspective: Does national governance quality matter?. International Review of Financial Analysis, 41, 148-161.
Palia, D., & Lichtenberg, F. (1999). Managerial ownership and firm performance: A re-examination using productivity measurement. Journal of Corporate Finance, 5(4), 323-339.
Ruan, W., Tian, G., & Ma, S. (2011). Managerial ownership, capital structure and firm value: Evidence from China’s civilian-run firms. Australasian Accounting, Business and Finance Journal, 5(3), 73-92.
Selarka, E. (2005). Ownership concentration and firm value: a study from the Indian corporate sector. Emerging Markets Finance and Trade, 41(6), 83-108.
Shleifer, A., & Vishny, R. W. (1989). Management entrenchment: The case of manager-specific investments. Journal of financial economics, 25(1), 123-139.
Trần Minh Trí và Dương Như Hùng (2011). Ảnh hưởng của tỉ lệ sở hữu quản trị đến hiệu quả kinh doanh của các công ty niêm yết trên sàn Sở giao dịch chứng khoán Thành phố Hồ Chí Minh. Tạp chí phát triển KH&CN, 14(02), 116-124.
Phan Bùi Gia Thủy, Trần Đức Tài và Trần Thị Tú Anh. (2017). Ảnh hưởng của đặc điểm tổng giám đốc điều hành đến hiệu quả kinh doanh doanh nghiệp. Tạp chí Khoa học Đại học Mở TP. Hồ Chí Minh, 12(2), 205-217.
Vo, D., & Phan, T. (2013). Corporate governance and firm performance: Empirical evidence from Vietnam. Journal of Economic Development, 7(1), 62-78.
Zraiq, M. A. A., & Fadzil, F. H. B. (2018). The impact of ownership structure on firm performance: Evidence from Jordan. International Journal of Accounting, Finance and Risk Management, 3(1), 1-4.