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This paper documents a co-deterministic relationship between ownership concentration and corporate performance in an emerging economy - Bangladesh. Building on extant literature, we use a simultaneous equations approach to model a bi-directional relationship between ownership concentration and corporate value. This offers new evidence on the ownership - value relationship and, in particular, with reference to corporate governance structures in South Asia. Based on our evidence, we argue for a robust governance structures in emerging market economies that fit the socio-economic environment of the country concerned rather than simply importing models of governance. This structure can incorporate the internal and external disciplinary monitoring mechanisms necessary to combat conflicting managerial incentives and other market anomalies and strengthen overall governance in emerging economies. |
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