Corporate Governance Through Ownership Structure: Evidence from KSE-100 Index

South Asian Journal of Management Sciences Vol. 7, No. 2, (Fall 2013) 59 – 72

14 Pages Posted: 11 Jun 2019

See all articles by Aqsa Shabbir

Aqsa Shabbir

Government College University - Faisalabad

Dr. Safdar Husain Tahir

Division of Finance, Lyallpur Business School, Govt. College University Faisalabad

Bilal Aziz

Independent

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Date Written: May 26, 2019

Abstract

This paper examined the association between ownership structure, firm performance and dividend policy with respect to Governance perspective of companies present in Karachi Stock Exchange (KSE). A sample of 45 Nonfinancial KSE-100 Index listed firms for a period of 2010 to 2013 has been taken for analysis of this study. Multiple Regression Models are applied on the panel data to measure the relationship between ownership structure, firm performance and dividend policy. The empirical results provide evidence that ownership structure significantly affects the dividend policy and firm performance in connection with family ownership concentration. The empirical results also exhibit a significant negative relation between Dividend payments and ownership concentration and thus support the Entrenchment Theory; it means that the major shareholders protect their own benefit at the cost of minor stakeholders. Furthermore, the results also showed a positive relation of firm performance with foreign holdings, which means better performance is an attractive sign for the foreign investment and financial health of the economy.

Keywords: Ownership Structure, Firm Performance, Dividend Policy, Entrenchment Theory, Family Ownership Concentration

JEL Classification: M1, G1, G2, G3

Suggested Citation

Shabbir, Aqsa and Tahir, Dr. Safdar Husain and Aziz, Bilal, Corporate Governance Through Ownership Structure: Evidence from KSE-100 Index (May 26, 2019). South Asian Journal of Management Sciences Vol. 7, No. 2, (Fall 2013) 59 – 72 , Available at SSRN: https://ssrn.com/abstract=3394500

Aqsa Shabbir

Government College University - Faisalabad ( email )

Allama Iqbal Road
Faisalabad
Pakistan

Dr. Safdar Husain Tahir (Contact Author)

Division of Finance, Lyallpur Business School, Govt. College University Faisalabad ( email )

Jinnah Block New Campus
Jhang Road Faisalabad
Faisalabad, Punjab 38000
Pakistan
+923017091244 (Phone)

Bilal Aziz

Independent

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