ARTICLE

EFFECT OF OWNERSHIP ON FIRM PERFORMANCE IN SELECTED G20 COUNTRIES ACROSS THE DEVELOPMENT SPECTRUM

  1. HOME
  2. ARTICLE

08 Pages : 89-98

http://dx.doi.org/10.31703/ger.2019(IV-IV).08      10.31703/ger.2019(IV-IV).08      Published : Dec 2019

Effect of Ownership on Firm Performance in Selected G-20 Countries Across the Development Spectrum.

Abstract

    This study investigates the effect of ownership on firm performance of state-owned and non-state-owned enterprises in elected G20 countries and across the development spectrum. Annual financial and accounting data from the period 2011-2015 are compiled for 252, state-owned and 6503, non-state-owned enterprises. The empirical results show that state ownership and firm performance are negatively associated with selected G-20countries. This is also confirmed when countries are considered with respect to their level of development except for High-Income countries. The poor performance of state-owned enterprises in less developed countries can be justified by the argument that state-owned enterprises suffer from the intervention of self-oriented politicians, which leads to lower-than-expected performance.

    Firm Performance; State Ownership; Development Spectrum; Leverage

    (1) Yusuf Amin
    PhD. Scholar, Eastern Mediterranean University Famagusta, North Cyprus.
    (2) Syed Imran Khan
    Lecturer, IBL, Abdul Wali Khan University, Mardan, KP, Pakistan.
    (3) Noor Hassan
    Lecturer, Department of Management Sciences, Timergara Campus, Abdul Wali Khan University, Mardan, KP, Pakistan.
Fulltext PDF

References

  • Ahuja, G., & Majumdar, S. K. (1998). An Assessment of the performance of Indian StateOwned enterprises. Journal of Productivity Analysis, 9, 113-132.
  • Alchian, A. (1977).
  • Amin, M. Y., Besim, M., & Haq, Z. (2019). Does state ownership really matter for capital structure in selected G-20 economies? Economic Research 32(1): 3144-3161
  • Berle A, Means G (1932), the Modern Corporation and private property (2nd edition) Mac Millan, New York p. 268
  • Boardman, A. E., & Vining, A. R. (1989). Ownership and performance in competitive environments: A comparison of the performance of private, mixed, and stateowned enterprises. Journal of Law and Economics, 32, 1-33.
  • Boycko, M., Shleifer, A., & Robert, V. W. (1996). Theory of Privatization. The Economic Journal, 106, 309-319.
  • Caves, Douglas, W. and Christensen, Laurits, R. 1980. The Relative Efficiency of Public and Private Firms in Competitive Environment: The Case of Canadian Railroads. Journal of Political Economy, 88(5), 958-976.
  • Dang, A. R., Le, N., & Vu, M.-C. (2018). Does corporate governance influence firm performance? Quantile regression evidence from a transactional economy. Applied Economics Letters, 25(14), 984-988.
  • Davies, D. G. 1971. The Efficiency of Public versus Private Firms: The Case of Australian's Two Airlines. Journal of Law and Economics. Vol. XIV, No. 1.
  • Dewenter, K. L., & Malatesta, P. H. (2001). State-Owned and privately Owned Firms: An Empirical Analysis of Profitability, Leverage, and Labor Intensity. American Economic Review, 91, 320-335.
  • Dinc, I. S. (2004). Politicians and banks: Political influences on government-owned banks in emerging markets. Journal of Financial Economics, 77, 453-479.
  • Dong, Y., Liu, Z., Shen, Z., & Sun , Q. (2014). Political patronage and capital structure in China. Emerging Markets Finance and Trade, 50(3), 102-125.
  • Driffield, N., Mahambare, N., & Pal, S. (2005). How ownership structure affects capital structure and firm performance? Recent evidence from East Asia. Proceedings (p. 45). Porto: European Association for Research in Industrial Economics.
  • Fraser, D. R., Zhang, H., & Derashid, C. (2006). Capital structure and political patronage: The case of Malaysia. Journal of Banking and Finance, 30, 1291- 1308.
  • Haq, Z. (2013). Does income and income distribution determine global food and beverage products trade? Agribusiness: An International Journal, 29(4): 509-523.
  • Haq, Z., Meilke, K., & Cranfield, J. (2013). Selection bias in a gravity model of Agrifood trade. European Review of Agricultural Economics, 40 (2): 331-360
  • Haq, Z., & Meilke, K. (2010). Do the BRICs and Emerging Markets Differ in their Agrifood Trade? Journal of Agricultural Economics 61(1): 1-1
  • Jensen, M. C. (1986). Agency cost of free cash flow, corporate finance and takeovers. American Economic Review, 76, 323-339.
  • Kang, Y., & Kim, B. (2012). Ownership structure and firm performance: Evidence from the Chinese corporate reform. China Economic Review, 23, 471-481.
  • Majumdar, S. K. (1996). Assessing comparative efficiency of the state-owned mixed and private sectors in Indian industry. Public Choice, 96, 1-24.
  • Putterman, L. (1993). Ownership and the nature of firm. Journal of Comparitive Economics, 17, 243-263.
  • Shah, B., & Saeed, R. (2011). ownership structure and performance of firms, empirical evidence from an emerging market. African Journal of Business Management, 5(2), 515-523.
  • Sheshinski, E., & López-Calva , L. F. (2003). Privatization and Its benefits: Theory and Evidence. CESifo Economic Studies, 49, 429-459.
  • Smith, A. (1776). The Wealth of Nations. London: W. Strahan and T. Cadell.
  • Sun, Q., & Tong, W. H. (2003). China share issue privatization: the extent of its success. Journal of Financial Economics, 70(2), 183-222.
  • Tian, George, L. (2001) State Shareholding and the Value of China's Firms. Journal Article. SSRN Working Paper Series. London Business School, Regent's Park, London NW1 4SA, UK. 1-47.
  • Ting, I. W., & Lean, H. H. (2011). Capital structure of government-linked companies in Malaysia. Journal of Accounting and Finance, 7, 137-156
  • Vickers, J. and Yarrow, G. 1991. Economic Perspectives on Privatization. Journal of Economic Perspectives. 5(2), 111-132.
  • Vining, Aidan, R. and Boardman, Anthony, E. 1992. Ownership versus Competition: Efficiency in Public Enterprise. Public choice. Kluwer Academic Publishers. Netherlands. 205-239.
  • Vining, A. R., & Boardman, A. E. (1992). Ownership versus Competition: Efficiency in Public Enterprise. Public choice. Kluwer Academic Publishers, 73(2), 205-239.
  • Zhengwei, W. (2013). Optimal capital structure: case of SOE versus private listed corporation. Chinese Management Studies, 7, 604-616.

Cite this article

APA

    APA : Amin, Y., Khan, S. I., & Hassan, N. (2019). Effect of Ownership on Firm Performance in Selected G-20 Countries Across the Development Spectrum.. Global Economics Review, IV(IV), 89-98. https://doi.org/10.31703/ger.2019(IV-IV).08

CHICAGO

    CHICAGO : Amin, Yusuf, Syed Imran Khan, and Noor Hassan. 2019. "Effect of Ownership on Firm Performance in Selected G-20 Countries Across the Development Spectrum.." Global Economics Review, IV (IV): 89-98 doi: 10.31703/ger.2019(IV-IV).08

HARVARD

    HARVARD : AMIN, Y., KHAN, S. I. & HASSAN, N. 2019. Effect of Ownership on Firm Performance in Selected G-20 Countries Across the Development Spectrum.. Global Economics Review, IV, 89-98.

MHRA

    MHRA : Amin, Yusuf, Syed Imran Khan, and Noor Hassan. 2019. "Effect of Ownership on Firm Performance in Selected G-20 Countries Across the Development Spectrum.." Global Economics Review, IV: 89-98

MLA

    MLA : Amin, Yusuf, Syed Imran Khan, and Noor Hassan. "Effect of Ownership on Firm Performance in Selected G-20 Countries Across the Development Spectrum.." Global Economics Review, IV.IV (2019): 89-98 Print.

OXFORD

    OXFORD : Amin, Yusuf, Khan, Syed Imran, and Hassan, Noor (2019), "Effect of Ownership on Firm Performance in Selected G-20 Countries Across the Development Spectrum.", Global Economics Review, IV (IV), 89-98

TURABIAN

    TURABIAN : Amin, Yusuf, Syed Imran Khan, and Noor Hassan. "Effect of Ownership on Firm Performance in Selected G-20 Countries Across the Development Spectrum.." Global Economics Review IV, no. IV (2019): 89-98. https://doi.org/10.31703/ger.2019(IV-IV).08