UNCTAD Insights: Assessing the impact of foreign ownership on firm performance by size: Evidence from firms in developed and developing countries

2020 ◽  
Vol 27 (2) ◽  
pp. 183-204
Author(s):  
S. Selsah Pasali ◽  
Arslan Chaudhary
Keyword(s):  
Developing Countries ◽  
Firm Performance ◽  
Foreign Ownership ◽  
The Impact

SERVICE COMPETITION, FIRM PERFORMANCE AND RESOURCE ALLOCATION IN MANUFACTURING: EVIDENCE FROM FIRM-LEVEL DATA IN CHINA

2013 ◽  
Vol 10 (04) ◽  
pp. 1350010 ◽  
Author(s):  
LEI LIN ◽  
GUISHENG WU
Keyword(s):  
Resource Allocation ◽  
Developing Countries ◽  
Firm Performance ◽  
Financial Performance ◽  
Developed Countries ◽  
Manufacturing Firms ◽  
Equation Modeling ◽  
Service Competition ◽  
Resource Endowment ◽  
The Impact

Service-based differentiation competitive strategy has been hugely adopted by manufacturing firms in both developing and developed countries, which would influence firm performance and resource allocation mode. Against the background of developing countries such as China, this empirical study has two purposes. The first is to investigate the impact of service competition on firm performance. The second is to summarize the resource allocation mode which executives would adopt to implement service competition. Based on service-dominant (SD) logic, resource-based view (RBV) and service marketing theory, this paper constructs a theoretical framework to link the organizational resources (product-related resources and service-related resources), competitive advantage (product quality and service quality) and firm performance (financial performance and non-financial performance), and proposes several hypotheses about the relationships among these constructs. Based on the survey data obtained from manufacturing firms in China in 2006, this paper employs a structural equation modeling (SEM) approach with interaction effect involved to test the hypotheses. Several findings are found through data analysis. First, service competition has positive and significant impact on firm performance, and the contribution of product-related inputs on performance is much larger than that of service-related inputs. This implies that though the impact on performance of service competition is comparatively lower, service can still be the source of product differentiation and act as a positive complement to product-based competition. Second, consistent with our theoretical expectation, the finding indicates that there is a substitutive relationship between service-related resource and product-related resource to a certain degree, though weakly supported by data. This can be explained by the factors such as China's initial resource endowment, low-level stage of the market and the industry, etc. Finally, the paper discusses the theoretical and managerial implications of the research findings, which would provide empirical supports for the implementation of service-based differentiation strategy in manufacturing in developing countries.

The relationship between ownership structure and firm financial performance

2018 ◽  
Vol 25 (1) ◽  
pp. 319-333 ◽  
Author(s):  
Tariq Tawfeeq Yousif Alabdullah
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Emerging Economies ◽  
Ownership Structure ◽  
Foreign Ownership ◽  
Fiscal Year ◽  
Content Type ◽  
Firm Financial Performance ◽  
The Impact ◽  
Practical Implications

Purpose Previous studies that dealt with corporate governance have witnessed gradually significant growth that created some new trends. The purpose of this paper is to be involved in such trends through examining the link between ownership structure as one of the important corporate governance mechanisms and firm performance in Jordan as one of emerging economies. Design/methodology/approach The current study used the multiple regression method to analyze available data for non-financial firms listed in the Amman Stock Exchange for the fiscal year 2012. Findings The findings revealed that managerial ownership has a positive impact on performance. On the other hand, the findings surprisingly showed no evidence to support the impact of foreign ownership on performance. Moreover, there is a significant evidence to support the fact that company size has no impact on firm performance. The findings also revealed that industry type has no impact on firm performance. Practical implications The practical implications of the current study demonstrated that good corporate governance is imperative to all organizations and must be encouraged for the interest of all stakeholders. Unlike the majority of the previous studies, the current study unexpectedly found that foreign ownership is not significantly contributing to the firm performance. Thus, Jordanian Government and other related/responsible parties should formulate policies for the foreign investors. Originality/value Interestingly, from developed and developing countries perspective, the study is the first of its kind that exclusively chose the mechanisms of ownership structure in its relationship with firm performance represented by market share, where no previous study has tested foreign ownership in such relationship. In that, this study is the first study in emerging economies to investigate such a link. Such new insights on this relationship by current study provide helpful information that is of great value to the government, academics, policy makers, and other stakeholders.

Servitization impact on performance moderated by country development

2019 ◽  
Vol 27 (1) ◽  
pp. 302-318 ◽  
Author(s):  
Renata Moreno ◽  
Leonardo Marques ◽  
Rebecca Arkader
Keyword(s):  
Developing Countries ◽  
Firm Performance ◽  
Social Impact ◽  
Developing Economies ◽  
Developed Countries ◽  
Content Type ◽  
Advanced Economies ◽  
Medium Level ◽  
And Performance ◽  
The Impact

Purpose In recent years, “servitization” has been studied extensively; however, as studies of the impact of servitization on firm performance offer mixed results, the conditions under which the relationship between servitization and performance becomes more significant are contested in the literature. These mixed results have led to the term “service paradox.” The paper aims to discuss these issues. Design/methodology/approach This study investigates servitization in the assembly industry based on a multi-country survey covering 539 industry plants in 22 countries. Findings The study contributes to the research on servitization by adding a contextual perspective to this relationship, taking into account level of development of the country in which a firm is located. Besides confirming the correlation between the servitization and performance, our study unveils a counter-intuitive result: a medium level of development of the country in which a firm is based corresponds to a stronger relationship between servitization and firm performance, whereas higher levels of development seem to diminish the increase in performance. Social implications This study balances out the focus in servitization on advanced economies and help to unveil its benefits in developing countries. Fostering servitization in developing economies can lead to social impact resulting from job shifts from manufacturing to service and the correlated implications for workers’ training and higher motivation experienced in service-based jobs. Originality/value Our study unpacks the “service paradox” and indicates that industry plants in developing countries can still harness the benefits of being first-movers, whereas, in developed countries, servitization may have become an order qualifier rather than a factor of differentiation.

scholarly journals Exploring non-linear relationship between foreign ownership and firm performance

2021 ◽  
Vol 18 (3, special issue) ◽  
pp. 257-274
Author(s):  
Neeraj Gupta ◽  
Tarun Agarwal ◽  
Bhagwan Jagwani
Keyword(s):  
Firm Performance ◽  
Linear Relationship ◽  
Foreign Ownership ◽  
Individual Investors ◽  
Non Linear ◽  
Effect Estimation ◽  
Institutional Shareholders ◽  
Relationship Of ◽  
The Impact ◽  
The Relationship

This study aims to examine the impact of foreign ownership on the performance of Indian firms. Additionally, it also analyses the non-linear relationship of foreign ownership with firm performance. A panel data approach has been used in this study. Specifically, the fixed effect estimation technique is used to examine the relationship between foreign ownership and firm performance during the period 2009–2010 to 2018–2019. The foreign institutional shareholders and the foreign corporate bodies hold more shareholding than the foreign individual investors. The authors find that foreign institutional investors and foreign corporate bodies bear a positive relationship with the performance of Indian firms. Additionally, foreign ownership shows a non-linear relationship with firm performance. The results are robust across the various proxies of firm performance, and sub-samples based on foreign ownership

scholarly journals Corporate Governance: Theory and Practice Impact of Corporate Governance on Firm Performance

2019 ◽  
Vol 7 (1) ◽  
pp. 66-75
Author(s):  
Rizwan Khalid ◽  
◽  
Tayyab Ali ◽  
Muhammad Usman Javed
Keyword(s):  
Developing Countries ◽  
Corporate Governance ◽  
Firm Performance ◽  
Empirical Studies ◽  
Governance Structure ◽  
Developed Countries ◽  
Theory And Practice ◽  
Corporate Governance Structure ◽  
Equal Importance ◽  
The Impact

Corporate governance is one of most widely researched topics in the different fields of management sciences. Additionally, governance plays equal role in firm performance in all countries especially developing countries become more important like Pakistan which contain equal importance to be studied with in subject to developed countries as to be well known in governance values, moreover there is increased interest to observe impact of corporate governance on different dimensions of firm performance. The objective of this paper is to underlay the corporate governance theories and practices and we have studied and try to analysis the impact of corporate governance structure on firm performance. This is a descriptive type of study in which we analysis different studies as coded all studies as they may have different implications in developed countries but here they may have different results as in developing countries and Pakistan is different among other Asian countries because of number of reasons as discussed in introduction with respect to its governance structure. We also have find interesting results as from other empirical studies recently a part of Pakistan perspective research and having number of important implications with respect of changes need to be made in Pakistan’s governance structure. Findings shows there is impact of corporate governance on firm performance and market performance of firm also been effected with governance style

Foreign ownership and performance: mediating and moderating effects

2019 ◽  
Vol 29 (2) ◽  
pp. 86-102
Author(s):  
Vicky Ching Gu ◽  
Ray Qing Cao ◽  
John Wang
Keyword(s):  
Firm Performance ◽  
International Diversification ◽  
Foreign Ownership ◽  
Competitive Environment ◽  
Organizational Strategies ◽  
Content Type ◽  
Financial Measures ◽  
And Performance ◽  
The Impact ◽  
The Relationship

Purpose Although foreign ownership has been widely studied to show its impact on firm performance, the findings are mixed and the underlying rational to explain the impact is not entirely clear. The purpose of this study is to determine if there is a direct relationship between foreign ownership and performance or if this relationship is indirect and affected by mediating and moderating variables such as international diversification and competitive environment. Design/methodology/approach Financial data, survey data and other financial measures for known indices are used in the research, and SPSS and SEM (Stata 15) analyses are used to test empirically derived hypotheses. Findings Results from this study indicate that the relationship between foreign ownership and firm performance is mediated by international diversification, such that higher levels of both foreign corporate and foreign institutional ownership lead to higher levels of international diversification, which then lead to higher levels of firm performance. Results from this study also indicate that the competitive environment moderates the relationship between a firm’s level of international diversification and performance, such that the effect of international diversification on performance is greater as the environment becomes more competitive. Practical implications This study provides empirical evidence for managers to seriously consider the impact of foreign ownership on decisions involving international diversification, along with competitive environment, when formulating and implementing organizational strategies. Originality/value This study extends prior research examining the effects of foreign ownership on firm performance by uniquely showing how international diversification mediates the relationship between foreign ownership and firm performance and how the competitive environment moderates the relationship between international diversification and firm performance.

Disclosure of corporate sustainability performance and firm performance in Asia

2018 ◽  
Vol 26 (4) ◽  
pp. 414-443 ◽  
Author(s):  
Najul Laskar ◽  
Santi Gopal Maji
Keyword(s):  
Developing Countries ◽  
Firm Performance ◽  
Panel Data ◽  
South Korea ◽  
Regression Model ◽  
Corporate Sustainability ◽  
Content Type ◽  
Sustainability Performance ◽  
Corporate Sustainability Performance ◽  
The Impact

Purpose The purpose of this paper is to examine the disclosure pattern of corporate sustainability (CS) and the influence of sustainability reporting on firm performance of four countries in Asia – Japan, South Korea, Indonesia and India. Design/methodology/approach The authors have collected the sustainability reports and annual reports of 111 firms from four Asian countries for a period of six years. Based on the framework of Global Reporting Initiatives (GRI, 3 and 3.1), content analysis is used for calculating the disclosure score of corporate sustainability performance (CSP). These scores are further used to examine the impact on firm performance by employing a panel data regression model. Findings The study finds that the average level and quality of disclosure are the highest for Japanese firms, followed by India and South Korea. However, in the case of Indonesia, the average score is very low. Further, the study finds a significant difference in the disclosure of overall sustainability as well as components of sustainability between the countries. The regression results indicate the positive impact of CSP (both in terms of level and quality) on MBR. Specifically, the outcome of the regression model reveals that both the level and quality disclosure of CS are crucial for enhancing firm value for both the developed and developing countries of Asia. Moreover, the relative influence of CSP (both in terms of level and quality) on firm performance is found to be more in developed countries than the developing countries of Asia. Originality/value This is the first comprehensive study in the Asian context to investigate the disclosure pattern of CSP and also examine the association between CSP and firm performance by employing the panel data model. The outcome of this study is useful for policy implication.

scholarly journals The Firm’s Performance in Relation to Capital Structure and Foreign Ownership: Evidence from Vietnam

2021 ◽  
Vol 5 (1) ◽  
pp. 35
Author(s):  
Duy Suu Nguyen ◽  
Viet Dan Nguyen ◽  
Duc Thanh Tran ◽  
Michael Joseph Dempsey
Keyword(s):  
Firm Performance ◽  
Capital Structure ◽  
Random Effect ◽  
Foreign Ownership ◽  
Positive Influence ◽  
Least Square ◽  
Financial Leverage ◽  
Creative Commons ◽  
Negative Effect ◽  
The Impact

The paper examines the impact of capital structure in the context of foreign ownership on firm performance on non-financial companies in Vietnam between 2008 and 2018. The study employs Pooled OLS, Fixed effect, random effect, and Generalized Least Square to analyze the data. The study finds a non-linear relationship of foreign ownership and firm performance, so that the relationship, which is at first a positive one, becomes negative beyond a certain level of foreign ownership (30-45% ownership depending on the measure of performance). This insight is then combined with a generally inverse relationship between capital structure and performance. Besides, we find that the firm’s size (SIZE) has a positive influence on profitability and financial leverage, while both financial leverage (LEV) and the number of listed years of company (AGE) impact negatively on firm performance. Furthermore, growth of sales (GROWTH) has a positive effect on the debt ratio, and growth rate (GDP) has a negative effect on financial leverage. This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium provided the original work is properly cited.

Corporate governance and firm performance: an empirical evidence from Syria

2018 ◽  
Vol 11 (4) ◽  
pp. 591-607 ◽  
Author(s):  
Zukaa Mardnly ◽  
Sulaiman Mouselli ◽  
Riad Abdulraouf
Keyword(s):  
Corporate Governance ◽  
Firm Performance ◽  
Ownership Structure ◽  
Audit Committee ◽  
Political Stability ◽  
Foreign Ownership ◽  
Content Type ◽  
Governance Indicators ◽  
Governance Index ◽  
The Impact

Purpose This study aims to examine the impact of aggregate and individual corporate governance provisions on firm performance on all firms listed at Damascus Securities Exchange (DSE) for the period between 2011 and 2015. In addition, it disentangles ownership structure provision to ownership concentration and foreign ownership and investigates which component of ownership structure stands behind the significance of ownership structure in explaining firm performance. Design/methodology/approach The study uses multiple linear regression models to analyze the relationship between aggregate corporate governance index and its provisions and firm performance. A corporate governance index is built on the basis of four mechanics (i.e. board of directors, audit, disclosure and ownership structure) for all firms listed at DSE. On the other hand, the dependent variable (firm performance) is measured using Earnings Per Share (EPS) and Return On Assets (ROA). The authors capture current war conditions using political stability and absence of violence indicator, one of Worldwide Governance Indicators accumulated by the World bank. Findings This study finds that ownership structure is the only significant corporate governance provision in determining Syrian firms’ performance, as it loads positively and significantly on firm performance proxies (ROA and EPS). Moreover, the analysis of ownership structure items shows that foreign ownership is the main source of this positive and significant impact. This result is robust for both measures of firm performance and in the presence of political stability indicator. Originality/value This paper provides evidence on corporate governance measures from Syrian Arab Republic, a developing country with an emerging stock exchange. It examines board structure, ownership structure, audit committee and disclosure in a period of crisis because of the war in this country. Moreover, it uncovers that foreign ownership is the only influential provision affecting firm performance at DSE. Furthermore, it combines firm-level governance indicators with country governance indicator of political stability and absence of violence.

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