Foreign and Domestic Ownership, Business Groups and Firm Performance: Evidence from a Large Emerging Market

50 Pages Posted: 30 Sep 2005

See all articles by Sytse Douma

Sytse Douma

Eindhoven University of Technology (TUE) - Department of Technology Management (PAV-U13)

Rejie George

Indian Institute of Management Bangalore

Rezaul Kabir

University of Twente - Department of Finance and Accounting

Multiple version iconThere are 2 versions of this paper

Date Written: October 2003

Abstract

We adopt a multi-theoretic approach to investigate a previously unexplored phenomenon in extant literature, namely the differential impact of foreign institutional and foreign corporate shareholders on the performance of emerging market firms. We show that the previously documented positive effect of foreign ownership on firm performance is substantially attributable to foreign corporations that have, on average, larger shareholding, higher commitment and longer-term involvement. We document the positive influence of corporations vis a vis financial institutions with respect to domestic shareholdings as well. We also find an interesting dichotomy in the impact of these shareholders depending on the business group affiliation of firms.

Keywords: Ownership structure, firm performance, corporate governance, business groups

JEL Classification: G30, G32, G34

Suggested Citation

Douma, Sytse and George, Rejie and Kabir, Rezaul, Foreign and Domestic Ownership, Business Groups and Firm Performance: Evidence from a Large Emerging Market (October 2003). Available at SSRN: https://ssrn.com/abstract=685783 or http://dx.doi.org/10.2139/ssrn.685783

Sytse Douma

Eindhoven University of Technology (TUE) - Department of Technology Management (PAV-U13) ( email )

Human Performance Management Group
P.O. Box 513
5600 MB Endhoven
Netherlands

Rejie George

Indian Institute of Management Bangalore ( email )

Bannerghatta Road
Bangalore, Karnataka 560076
India
+91-80-26993042 (Phone)
+91-80-26584050 (Fax)

Rezaul Kabir (Contact Author)

University of Twente - Department of Finance and Accounting ( email )

Faculty of Behavioral, Management & Social Science
P. O. Box 217
Enschede, 7500 AE
Netherlands
+31 53 489 4512 (Phone)
+31 53 489 2159 (Fax)

HOME PAGE: http://https://people.utwente.nl/r.kabir

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