Ownership Structure and Stock Price Crash Risk: Evidence from Karachi Stock Exchange

2019 ◽  
Vol 1 (2) ◽  
pp. 72-75
Author(s):  
Maheen Imtiaz ◽  
◽  
Khalid Mahmood Ahmad ◽  
Abdul Karim
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Stock Price ◽  
Stock Exchange ◽  
Multiple Linear Regression Model ◽  
Institutional Ownership ◽  
Crash Risk ◽  
Managerial Ownership ◽  
The Impact ◽  
A Company

Stock price crash risk is one of the most significant risks associated with the firm. Therefore, it is important to consider the factors which may influence the price crash risk. Various factors of corporate governance found to have an impact on the stock price crash risk. The ownership structure of the firm is a critical attribute of corporate governance. This study's objective is to determine the impact of two types of ownership of a company (managerial ownership and institutional ownership) on its stock price crash risk. To examine whether a firm's ownership structures have an association with stock price crash risk, the multiple linear regression model applied on the panel data of 190 companies listed on KSE for the year 2009-2018. The results of this study show that there is a significantly positive relationship between the institutional ownership and stock price crash risk. However, no association found between managerial ownership and price crash risk. These results imply that the percentage of institutional ownership should be reduced in the firm's ownership structure to reduce the firm's stock price crash risk.

scholarly journals PENGARUH PENERAPAN GOOD CORPORATE GOVERNANCE TERHADAP STRUKTUR MODAL PERUSAHAAN GO PUBLIC YANG TERCATAT DI BURSA EFEK INDONESIA

2013 ◽  
Vol 4 (1) ◽  
Author(s):  
ERIKA SEPTIANTY
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Managerial Ownership ◽  
Executive Directors ◽  
Control Variables ◽  
Good Corporate Governance ◽  
Equity Ratio ◽  
A Company

<p>Good Corporate Governance (GCG) is increasingly popular. but has a very important meaning in the system of corporate governance and managerial aspects, and investing in a good organization profit organization and this research uses its capital structure as measured by the debt-equity ratio as the dependent variable, while institutional ownership and managerial ownership as well as company size and profitability as the independent variable and three control variables. Control variables are variables that are controlled or held constant so that the effect o outside factors.  Control variables used in the study include the Board of Directors, non-executive directors, and chair duality. Research is underway to find empirical evidence of the influence of the implementation of Good Corporate governanve the company's capital structure. The population used in this study is a company listed on the Indonesia Stock Exchange, while the sample is a company in the implementation of corporate governance ranking by IICG during the period 2005-2011. From the results of testing the hypothesis, suggesting that the effect of corporate governance is proxied by managerial ownership, institutional ownership and firm size has no influence not have any impact on capital structure. The research proves that the variables have an influence on the profitability of capital structure. In general, the results of this study indicate that companies listed on the Stock Exchange has not fully considering the use of corporate governance in determining capital structure.</p> <p>Keyword:        Managerial Ownership, Institutional Ownership, Profitability, Firm Size, Good Corporate Governance, Capital Structure.</p> <p> </p> <p><strong> </strong></p> <p><strong>ABSTRAK</strong></p> <p><em>Good Corporate Governance </em>(GCG) semakin populer. namun mempunyai arti yang sangat penting dalam sistem tata kelola perusahaan maupun dalam aspek manajerial dan investasi dalam suatu organisasi baik organisasi laba dan nonlaba.Penelitian ini menggunakan struktur modal yang diukur dengan <em>debt-equity ratio</em> sebagai variabel dependen, sedangkan kepemilikan institusional dan kepemilikan manajerial, serta ukuran perusahaan dan profitabilitas sebagai variabel independen dan tiga variabel kontrol.  Variabel kontrol merupakan variabel yang dikendalikan atau dibuat konstan sehingga pengaruh variabel independen terhadap variabel dependen tidak dipengaruhi oleh faktor luar yang tidak diteliti.  Variabel kontrol yang digunakan dalam penelitian antara lain Dewan Direksi, <em>non-executive directors</em>, dan<em> chair duality</em>. Penelitian ini dilakukan untuk menemukan bukti empris adanya pengaruh penerapan <em>Good Corporate governanve</em> terhadap struktur modal perusahaan. Populasi yang digunakan dalam penelitian ini adalah perusahaan yang terdaftar di Bursa Efek Indonesia, sedangkan sampel adalah perusahaan yang masuk dalam pemeringkatan penerapan <em>corporate governance </em>yang dilakukan oleh IICG selama periode 2005-2011. Dari hasil pengujian hipotesis, menunjukkan bahwa pengaruh <em>corporate governance</em> yang diproksikan oleh kepemilikan manajerial, kepemilikan institusional dan ukuran perusahaan tidak mempunyai pengaruh terhadap struktur modal.  Hasil penelitian membuktikan bahwa variabel profitabilitas mempunyai pengaruh terhadap struktur modal.Secara umum hasil penelitian ini menunjukkan bahwa perusahaan yang terdaftar di BEI belum sepenuhnya memperhatikan penggunaan corporate governance dalam menentukan kebijakan struktur modalnya,</p> <p>kata kunci: <em>good corporate governanve</em>, kepemilikan manajerial, kepemilikan institusional, profitabilitas, ukuran perusahaan, struktur modal</p>

scholarly journals Ownership Structure, Corporate Governance and Capital Structure of Non-Financial Firms of Pakistan

2018 ◽  
Vol 10 (1) ◽  
pp. 31-46
Author(s):  
Hassan Ahmad ◽  
Nasreen Akhter ◽  
Tariq Siddiq ◽  
Zahid Iqbal
Keyword(s):  
Corporate Governance ◽  
Capital Structure ◽  
Ownership Structure ◽  
Negative Impact ◽  
Institutional Ownership ◽  
Board Independence ◽  
Managerial Ownership ◽  
Debt Ratio ◽  
Significant Negative Impact ◽  
The Impact

This study is undertaken with the purpose of investigating the impact of ownership structure and corporate governance on the capital structure of Pakistani listed firms from 2011-2014, feasible general least square is used to investigate the impact of ownership structure and corporate governance on capital structure of KSE 100 index firms. Explanatory variables include ownership concentration, managerial ownership, foreign ownership, institutional ownership, board size, board independence and CEO duality along with the three control variables namely firm size, firm profitability and liquidity. There is insignificant positive relationship between ownership concentration and capital structure, managerial ownership has a significant negative impact on debt ratio. Foreign ownership has also a significant negative impact on firm capital structure and institutional ownership has significant positive impact on capital structure. Board size is positively related to capital structure, board independence also positively related to firm’s debt ratio but CEO duality negatively related to the dependent variable, all these variables have significant impact on capital structure of Pakistani firms. 

Managerial ownership and stock price crash risk: a case of Iranian firms

2019 ◽  
Vol 13 (1) ◽  
pp. 42-55
Author(s):  
Ali Haghighi ◽  
Mehdi Safari Gerayli
Keyword(s):  
Stock Price ◽  
Stock Exchange ◽  
Threshold Level ◽  
Bad News ◽  
Crash Risk ◽  
Managerial Ownership ◽  
Alternative Measure ◽  
Content Type ◽  
Research Hypothesis ◽  
The Impact

Purpose Increasing managerial ownership gives rise to the managerial opportunistic behaviors, among which bad news hoarding has attracted a lot of attention. Nevertheless, there always exists a threshold level at which the accumulated bad news releases abruptly, thereby resulting in corporate stock price crash risk. On the above arguments, this study aims to investigate the impact of managerial ownership on stock price crash risk of the firms listed on the Tehran Stock Exchange (TSE). Design/methodology/approach Sample includes the 485 firm-year observations from companies listed on the TSE during the years 2012-2016 and the research hypothesis was tested using multivariate regression model based on panel data. Findings The results reveal that managerial ownership increases the corporate stock price crash risk. These findings are robust to an alternative measure of stock price crash risk, individual analysis of the research hypothesis for each year and endogeneity concern. Originality/value The current study is almost the first study, which has been conducted in emerging capital markets, so the findings of the study not only extend the extant theoretical literature concerning the stock price crash risk in developing countries including emerging capital market of Iran but also help policymakers, regulators, investors and users of financial reports to make informed decisions.

scholarly journals Corporate Governance Structures and Probability of Financial Distress: Evidence From Indonesia Manufacturing Companies

2020 ◽  
Vol 12 (1) ◽  
pp. 174
Author(s):  
Maria Goreti Kentris Indarti ◽  
Jacobus Widiatmoko ◽  
Imang Dapit Pamungkas
Keyword(s):  
Corporate Governance ◽  
Financial Distress ◽  
Audit Committee ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Negative Influence ◽  
Audit Committees ◽  
Managerial Ownership ◽  
Manufacturing Companies ◽  
A Company

This study aims to examine the effect of four variables, which include independent commissioners, audit committees, institutional ownership and managerial ownership as a proxy for the corporate governance mechanisms on financial distress. This was carried out on the manufacturing companies listed on the Indonesia Stock Exchange (IDX) in 2016-2018. The samples were selected using the purposive sampling method and 224 data were obtained. The hypothesis in this study was tested using logistic regression. The results showed that independent commissioners have a negative influence on financial distress, while the audit committee, institutional ownership and managerial ownership have no effect. This implies that an independent commissioner functions as an effective supervisory mechanism to prevent a company from experiencing financial distress. Furthermore, two control variables used in this study, namely leverage and profitability, were able to produce results as predicted. It was discovered that a higher leverage level leads to a greater possibility of experiencing financial distress and conversely, the higher the profitability of a company, the lower the probability of experiencing financial distress.

scholarly journals Pengaruh Good Corporate Governance pada Nilai Perusahaan dengan Kinerja Keuangan sebagai Variabel Mediasi

2020 ◽  
Vol 30 (2) ◽  
pp. 388
Author(s):  
Gede Marco Pradana Dika Putra ◽  
Ni Gusti Putu Wirawati
Keyword(s):  
Corporate Governance ◽  
Financial Performance ◽  
Firm Value ◽  
Stock Price ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Managerial Ownership ◽  
Good Corporate Governance ◽  
The Relationship ◽  
Positive Effect

A firm not only aims to get profits but also maximize its value  which can be reflected in stock price. Research aims to examine the effect of good corporate governance on firm value with financial performance as a mediating variable. The study conducted on LQ45 companies listed on Indonesia Stock Exchange in 2017-2018. Sample determined by purposive sampling with 32 samples. Path analysis was used. analysis showed managerial ownership and institutional ownership had no effect on financial performance, managerial ownership and institutional ownership had no effect on firm value, financial performance had a positive effect on firm value, and financial performance was unable to mediate the relationship between GCG and firm value. Keywords: Good Corporate Governance; Firm Value.

scholarly journals The Influence of Ownership Structure, Asset Structure, and Earning Volatility on Debt Policy in Indonesia

2019 ◽  
Vol 2 (1) ◽  
pp. 93-106
Author(s):  
Saiful Anwar
Keyword(s):  
Regression Model ◽  
Ownership Structure ◽  
Stock Price ◽  
Stepwise Regression ◽  
Stock Exchange ◽  
Secondary Data ◽  
Institutional Ownership ◽  
Pharmaceutical Companies ◽  
Managerial Ownership ◽  
Debt Policy

The higher the proportion of debt, the higher the stock price, but at a certain point, the increase in debt will reduce the value of the company because the benefits obtained from the use of debt are smaller than the costs incurred. The purpose of this study is to analyze the influence of ownership structure – managerial ownership and institutional ownership, asset structure, and earning volatility on debt policy. The data used in this study are secondary data in the form of managerial ownership data, institutional ownership, asset structure, earning volatility and debt policy in pharmaceutical companies that go public on the Indonesia Stock Exchange 2013-2017. The statistical method used is the Stepwise Regression, because there is high multicollinearity in managerial ownership variables, institutional ownership, assets structure, earning volatility. Based on the results of the Stepwise Regression shows that the variables entered into the regression model are earning volatility. Other variables such as managerial ownership, institutional ownership, asset structures are not included in the Stepwise Regression so that conclusion is only earning volatility variable that influences the debt policy earning volatility variables that affect debt policy.

scholarly journals LIQUIDITY RISK DISCLOSURE: A REVIEW OF CORPORATE GOVERNANCE

2019 ◽  
Vol 4 (2) ◽  
pp. 147-155
Author(s):  
Shinta Permata Sari ◽  
Himmatus Sholikhah
Keyword(s):  
Corporate Governance ◽  
Sampling Method ◽  
Stock Exchange ◽  
Liquidity Risk ◽  
Sampling Technique ◽  
Institutional Ownership ◽  
Audit Committees ◽  
Managerial Ownership ◽  
Risk Disclosure ◽  
A Company

Liquidity risk is the potential loss arising from the inability of a company to fulfill its obligations or to fund an increase in assets at maturity without incurring unacceptable costs or losses. The purpose of this study is to analyze the corporate governance factors that influence liquidity risk disclosure. Its factors are the proportion of independent commissioners, audit committees, managerial ownership, and institutional ownership. The sampling technique used a purposive sampling method in consumer goods industrial classification companies listed on the Indonesia Stock Exchange on 2016-2018. The multiple regression uses to analyze the data. Results indicate that the proportion of commissioners and audit committees have an effect on liquidity risk disclosure, meanwhile managerial ownership and institutional ownership have no effect on liquidity risk disclosure.Keywords: liquidity risk disclosure, the proportion of independent commissioners, audit committees, managerial ownership, institutional ownership.

scholarly journals PENGARUH CORPORATE GOVERNANCE, STRUKTUR KEPEMILIKAN DAN LEVERAGE TERHADAP MANAJEMEN LABA (Studi pada Perusahaan Go Public Sektor Pertambangan yang terdaftar di Bursa Efek Indonesia tahun 2015-2018)

2019 ◽  
Vol 1 (1) ◽  
pp. 181
Author(s):  
Natalia Mahdalena ◽  
Ardian Prima Putra ◽  
Gustita Arnawati Putri
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Audit Committee ◽  
Sampling Method ◽  
Stock Exchange ◽  
Institutional Ownership ◽  
Earning Management ◽  
Managerial Ownership ◽  
Analysis Technique ◽  
Negative Effect

His study discusses to analyze corporate governance, ownership structure and leverage to earning management. The research was conducted at mining companies in Indonesia Stock Exchange 2015-2018. The samples used as many as 29 companies from the population of 83 companies, through a purposive sampling method. The data collection is done by using the method of observation nonparticipant through the financial statemens. The analysis technique aapplied is a technique of multiple linier regression analysis. The results show that audit committee negative effect on earning management, the proportion of commissioners no effect on earning management, managerial ownership no effect on earning management, institutional ownership no effect on earning management and leverage negative effect on earning management.Keyword : audit committee, proportion of commissioners, managerial ownership, institutional ownership, leverage, earning management

The impact of ownership structure on the cost of equity in emerging markets

2020 ◽  
Vol 43 (10) ◽  
pp. 1221-1239
Author(s):  
Saad Faysal ◽  
Mahdi Salehi ◽  
Mahdi Moradi
Keyword(s):  
Corporate Governance ◽  
Ownership Structure ◽  
Institutional Ownership ◽  
Managerial Ownership ◽  
Cost Of Equity ◽  
Asian Countries ◽  
Content Type ◽  
The Cost ◽  
The Impact

Purpose The purpose of this study is to cover the ownership structure as (institutional ownership and managerial ownership) influencing the cost of equity in emerging markets. Design/methodology/approach The authors applied the regression model with the fixed-effect model in the data. Data collected from listed companies in the Iraq-Iran Stock Exchange during 2012-2017. Findings The authors found a significant positive associated between institutional ownership and the cost of equity in the Iranian and Iraqi contexts. The results also reveal a significant negative associated between managerial ownership with the cost of equity in the Iranian and Iraqi contexts. This means that when managerial ownership is increased, the cost of equity will be reduced. These results support the role of inside ownership to enhance fixed performance by reducing the cost of equity. So, managerial ownership can be a substitute for all shareholders. Moreover, the results indicate a similarity in the impact of the ownership structure on the cost of equity in the Iraqi and Iranian context, this means the similar elements among west Asian countries. Research limitations/implications Financial companies such as banks and investment companies were not listed due to the difference in the nature of their work with the other sectors in the Iranian and Iraqi stock exchanges. Moreover, the authors are heavily constrained as listed companies must continue during the study period to calculate the cost of equity. Therefore, the results are difficult to generalize widely. Practical implications This international study will enable investors in, as well as local and international investors to take the appropriate investment decision-making in the capital markets in these countries (Iraq and Iran). Moreover, it contributes significantly to helping corporate governance bloggers in Iraq and Iran understand the role of the ownership structure in corporate governance. Originality/value This is the first study of the interaction between institutional ownership, managerial ownership with the cost of equity in Iraq, the study will help complete the knowledge gap with developed markets. The results are important in future research because the authors believe that it is very important for the future to look at better for percentage levels of institutional and managerial ownership in the company ownership. Although the contribution is limited, it will provide a useful guide for more papers in other west Asian countries.

scholarly journals Structure of Board of Directors and Company’s Performance

2015 ◽  
Vol 10 (11) ◽  
pp. 43
Author(s):  
Ehsan Khansalar ◽  
Mahmood Lari Dasht-Bayaz ◽  
Darioush Maboodi
Keyword(s):  
Corporate Governance ◽  
Board Of Directors ◽  
Ownership Structure ◽  
Significant Relationship ◽  
Analytical Method ◽  
Conflicts Of Interest ◽  
Stock Exchange ◽  
External Shareholders ◽  
The Impact ◽  
A Company

The formation of shareholders or a board of directors’ structure is considered one of the important issues of corporate governance that impact on the motivation of managers. We shall consider that the impact of a board of directors’ ownership structure on the performance and productivity of corporate governance is a multidimensional and complicated issue. For this reason, we can expect all kinds of conflicts and contradictions of interests among people and groups, including conflicts of interest among owners and managers, shareholders and creditors, real and legal shareholders, internal and external shareholders etc. In this regard, there is extensive research about the impact of a board of directors’ ownership and managers on the performance and the value of a company within different countries and researchers have achieved different results and conflicts. Regarding a lot of research in this field, this research by using a descriptive-analytical method has studied the impact of a board of directors’ structure and features on the performance of corporate governance within companies listed on the Tehran stock exchange. The results indicate that there is a positive and significant relationship between CEO duality and a company’s performance, also there is no significant relationship between a board of directors’ adherence and a company’s performance.

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