Corporate Governance through Ownership Structure: Evidence from KSE-100 Index
South Asian Journal of Management Sciences, Vol. 7, No. 2, 59 – 72, Fall 2013
14 Pages Posted: 28 Apr 2020
Date Written: December 31, 2013
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 Non-financial 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: G34, G32
Suggested Citation: Suggested Citation