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Foreign and domestic ownership, business groups, and firm performance: evidence from a large emerging market

Year: 2006

Type: article

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‐á‐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. Copyright © 2006 John Wiley & Sons, Ltd.

Source: Strategic Management Journal

DOI: 10.1002/smj.535

Authors: Sytse Douma, Rejie George, Rezaul Kabir

Institutions: Eindhoven University of Technology, Indian Institute of Management Bangalore, University of Stirling

Language: English

Topic: Corporate Finance and Governance

Subfield: Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

Open Access status: green

OpenAlex ID: W3122651423

FWCI: 22.38

Cites: 76

Cited by: 792

Related to: 10