Bi-directional Relationship between Ownership Concentration and Performance in Bangladesh under Simultaneous Equations Approach

Title
Bi-directional Relationship between Ownership Concentration and Performance in Bangladesh under Simultaneous Equations Approach
Publication Date
2005
Author(s)
Farooque, Omar
( author )
OrcID: https://orcid.org/0000-0002-6346-1125
Email: ofarooqu@une.edu.au
UNE Id une-id:ofarooqu
van Zijl, Tony
Dunstan, Keitha
Karim, AKM Waresul
Type of document
Conference Publication
Language
en
Entity Type
Publication
Publisher
Asian Pacific Conference (APC)
Place of publication
Wellington, New Zealand
UNE publication id
une:6782
Abstract
Employing a simultaneous equations approach this paper models the ownership concentration and financial performance relationship. We document a 'Two-way' causal relationship for Bangladesh listed firms. Using an unbalanced pooled sample of 567 firm-years, the two-stage least square regression results suggest that both Tobin's Q and ROA, as performance measures, have a significant positive effect on ownership concentration. Similarly, shareholding concentration shows a positive significant impact on these performance measures. This implies that these variables interactively determined. A few other governance variables are also significant explanators. These results suggest that despite the institutional differences between Bangladesh and other developed economies there remains some similarity in internal governance mechanisms and agency problems.
Link
Citation
Proceedings of the 17th APC: Seventeenth Asian Pacific Conference on International Accounting Issues, p. 1-24
Start page
1
End page
24

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