Does board activeness strengthen the relationship between structure of corporate ownership and firm performance?

Feng Yuan; Rana Tanveer Hussain; Iqra Khalid; Mi Li

doi:10.3389/fpsyg.2022.1104178

Does board activeness strengthen the relationship between structure of corporate ownership and firm performance?

Front Psychol. 2023 Jan 10:13:1104178. doi: 10.3389/fpsyg.2022.1104178. eCollection 2022.

Authors

Feng Yuan¹, Rana Tanveer Hussain², Iqra Khalid², Mi Li³

Affiliations

¹ School of Economics and Management, Jilin Engineering Normal University, Changchun, China.
² School of Business and Management Sciences, Minhaj University Lahore, Lahore, Pakistan.
³ Faculty of Management and Economics, Kunming University of Science and Technology, Kunming, Yunnan, China.

Abstract

This study empirically investigates the moderating effect of board activeness on the relationship between the structure of corporate ownership and firm performance. The objective was evaluated using the hierarchal panel regressions with data from non-financial companies of the Pakistan Stock Exchange from 2009 to 2018, operationalizing the ownership structure as state ownership, associated companies, foreign ownership, ownership concentration, institutional ownership, and family ownership, and firm performance as operating performance, financial performance, and stock market performance. The findings of the study revealed that operating, financial, and stock market performance were favorably influenced by the ownership stakes of the state, associated concerns, institutions, and foreigners. Family interests proved to be diverse for the firm performance. The isolated effect of the board consistently uplifted the firm productivity, but its interactional impact with all the ownership stakeholders postulated differential outcomes for internal and external performance. The study provides valuable insights for policymakers and investors to make optimal strategies to manage ownership interests and enhance value.

Keywords: associated ownership; board activeness; family ownership; firm performance; foreign ownership; institutional ownership; ownership concentration; state ownership.