股权结构与公司绩效：以印度为例外文翻译

股权结构与公司绩效：以印度为例外文翻译外文翻译原文OwnershipStructureandCorporatePerformance:EvidencefromIndiaMaterialSource:InternationalJournalofHumanitiesandSocialScienceAuthor:AmanSrivastavaAbstractOwnershipstructureofanycompanyhasbeenaseriousagendaforcorporategovernanceandthatofperformanceofafirm.Thus,whoownsthefirm’sequityandhowdoesownershipaffectfirmvaluehasbeenatopicinvestigatedbyresearchersfordecades.Thus,theimpactofownershipstructureonfirmperformancehasbeenwidelytackledinvariousdevelopedmarketsandmorerecentlyinemergingmarkets,butwaslessdiscussedbefore,inIndiainrecentchangingenvironment.Thispaperisamoderateattempttoaddresstherelationshipofownershipstructureofthefirmanditsperformance.Itinvestigateswhethertheownershiptypeaffectssomekeyaccountingandmarketperformanceindicatorsoflistedfirms.The98mostactivelylistedcompaniesonBSE100indicesofBombayStockExchangeofIndia,whichconstitutethebulkoftrading,werechosentoconstitutethesampleofthestudyasofendof2009-10.ThefindingsindicatethepresenceofhighlyconcentratedownershipstructureintheIndianmarket.Theresultsoftheregressionanalysesindicatethatthedispersedownershippercentageinfluencescertaindimensionsofaccountingperformanceindicatorsi.e.ROAandROEbutnotstockmarketperformanceindicatorsi.e.P/EandP/BVratios,whichindicatethattheremightbeotherfactorseconomic,political,contextualaffectingfirmsperformanceotherthanownershipstructure.Keywords:Ownershipstructure,corporateperformance,corporategovernance,India1.IntroductionOwnershipstructureofanycompanyhasbeenaseriousagendaforcorporategovernanceandthatofperformanceofafirm.Thus,whoownsthefirm’sequityandhowdoesownershipaffectfirmvaluehasbeenatopicinvestigatedbyresearchersfordecades.Thus,theimpactofownershipstructureonfirmperformancehasbeenwidelytackledinvariousdevelopedmarketsandmorerecentlyinemergingmarkets,butwaslessdiscussedbefore,inIndiainrecentchangingenvironment.Thoughthemodernorganizationemphasizesthedivorceofmanagementandownership;inpractice,theinterestsofgroupmanagingthecompanycandifferfromtheinterestsofthosethatsupplythecapitaltothefirm.Corporategovernanceliteraturehasdevotedagreatdealofattentiontotheownershipstructureofcorporations.Shareholdersofpubliclyheldcorporationsaresonumerousandsmallthattheyareunabletoeffectivelycontrolthedecisionsofthemanagementteam,andthuscannotbeassuredthatthemanagementteamrepresentstheirinterests.Manysolutionstothisproblemhavebeenadvanced,asstatedpreviouslyi.e.thediscipliningeffectofthetakeovermarket,thepositiveincentiveeffectsofthemanagementshareholdingstakeandthebenefitsoflargemonitoringshareholders.Adifferentproblem,however,arisesinfirmswithlargecontrollingshareholders.Sincealargecontrollingshareholderhasboththeincentivesandthepowertocontrolthemanagementteam'sactions,management'smisbehaviorisasecondorderproblemwhensuchalargeshareholderexists.Instead,themainproblembecomescontrollingthelargeshareholder'sabuseofminorityshareholders.Inotherwords,holdersofamajorityofthevotingsharesinacorporation,throughtheirabilitytoelectandcontrolamajorityofthedirectorsandtodeterminetheoutcomeofshareholders'votesonothermatters,havetremendouspowertobenefitthemselvesattheexpenseofminorityshareholders.Thus,thetypeofownersaswellasthedistributionofownershipstakeswillundoubtedlyhaveanimpactontheperformanceoffirms.Mostoftheempiricalliteraturestudyingthelinkbetweencorporategovernanceandfirmperformanceusuallyconcentratesonaparticularaspectofgovernance,suchasboardofdirectors,shareholders’activism,compensation,anti-takeoverprovisions,investorprotectionetc.ThispaperisamoderateattempttoexaminetherelationshipofownershipstructureandperformanceoffirmsinIndiaTherestofthepaperisorganizedasfollows:Section2discussesontheliteraturereview,whereboththeoreticalandempiricalstudiesonpreviousworksarelookedinto.ItalsoincorporatesthecorporategovernancemechanisminIndia.Insection3,themethodologyofthisstudyisconsidered.Empiricalresultsanddiscussionsaremadeinsection4,whilesection5concludesthestudy.2.LiteratureReviewThefirm’sequityandhowdoesownershipaffectfirmvaluehasbeenatopicinvestigatedbyresearchersfordecades;however,mostofthestudiesinthiscontextareconductedoutsideofIndia.ThestudyfailedtodocumentanyrelevantstudyonthetopicinIndiancontext.FamaandJensen1983a&baddressestheagencyproblemsandtheyexplainedthatamajorsourceofcosttoshareholdersistheseparationofownershipandcontrolinthemoderncorporation.Evenindevelopedcountries,theseagencyproblemscontinuetobesourcesoflargecoststoshareholders1.DemstezandLehn1985arguedboththattheoptimalcorporateownershipstructurewasfirmspecific,andthatmarketcompetitionwouldderivefirmstowardthatoptimum.Becauseownershipwasendogenoustoexpectedperformance,theycautioned,anyregressionofprofitabilityonownershippatternsshouldyieldinsignificantresults.Morck.1988bytakingpercentageofsharesheldbytheboardofdirectorsofthecompanyasameasureofownershipconcentrationandholdingbothTobin’sQandaccountingprofitasperformancemeasureof500Fortunecompaniesandusingpiece-wiselinearregression,foundapositiverelationbetweenTobin’sQandboardownershiprangingfrom0%to5%,anegativerelationforboardownershiprangingfrom5%to25%,andagainapositiverelationforthesaidownershipabove25%.ItisarguedthattheseparationofownershipfromcontrolforacorporatefirmcreatesanagencyproblemthatresultsinconflictsbetweenshareholdersandmanagersJensenandMeckling,1976.Theinterestsofotherinvestorscangenerallybeprotectedthroughcontractualarrangementsbetweenthecompanyandconcernedstakeholders,leavingshareholdersastheresidualclaimantswhoseinterestscanadequatelybeprotectedonlythroughtheinstitutionsofcorporategovernanceShleiferandVishny,1997.LodererandMartin1997tookshareholdingbytheinsidersi.e.,director’sownershipasameasureofownership.TakingthesaidmeasureasendogenousvariableandTobin’sQasperformancemeasure,theyfoundthroughsimultaneousequationmodelthatownershipdoesnotpredictperformance,butperformanceisanegativepredictorofownership.SteenThomsenandTorbenPedersen1997examinetheimpactofownershipstructureoncompanyeconomicperformanceinthelargestcompaniesfrom12Europeannations.Accordingtotheirfindingsthepositivemarginaleffectofownershiptiestofinancialinstitutionsisstrongerinthemarket-basedBritishsystemthanincontinentalEurope.Cho1998foundthatfirmperformanceaffectsownershipstructuresignifyingpercentageofsharesheldbydirectors,butnotviceversa.JürgenWeigand2000documentedthat1thepresenceoflargeshareholdersdoesnotnecessarilyenhanceprofitability,and2thehighdegreeofownershipconcentrationseemstobeasub-optimalchoiceformanyofthetightlyheldGermancorporations.Theirresultsalsoimplyownershipconcentrationtoaffectprofitabilitysignificantlynegatively.Theirempiricalevidencesuggeststhatrepresentationofownersontheboardofexecutivedirectorsdoesnotmakeadifference.YoshiroMiwaandMarkRamseyer2001statedwithasampleof637JapanesefirmsandconfirmedtheequilibriummechanismbehindDemstez-Lehn.DemsetzandVillalonga2001investigatedtherelationbetweentheownershipstructureandtheperformanceaverageTobin’sQforfiveyears?1976-80ofthecorporationsifownershipismademultidimensionalandalsotreateditasanendogenousvariable.ByusingOrdinaryLeastSquaresOLSandTwo-stageLeastSquares2SLSregressionmodel,theyfoundnosignificantsystematicrelationbetweentheownershipstructureandfirmperformance.DemsetzandVillalonga2001,examinedtherelationshipbetweenownershipstructureandfirmperformanceofAustralianlistedcompanies.HerOLSresultssuggestthatownershipofsharesbythetopmanagementissignificantinexplainingtheperformancemeasuredbyaccountingrateofreturn,butnotsignificantifperformanceismeasuredbyTobin’sQ.However,whenownershipistreatedasendogenous,thesameisnotdependentuponanyoftheperformancemeasures.Lins2002investigateswhethermanagementownershipstructuresandlargenon-managementblockholdersarerelatedtofirmvalueacrossasampleof1433firmsfrom18emergingmarkets.Hefindsthatlargenon-managementcontrolrightsblockholdingshavingmorecontrolrightsarepositivelyrelatedtofirmvaluemeasuredbyTobin’sQ.MichaelLLemmonandKarlVLins2003useasampleof800firmsineightEastAsiancountriestostudytheeffectofownershipstructureonvalueduringtheregion’sfinancialcrisisThecrisisnegativelyimpactedfirm’sinvestmentopportunities,raisingtheincentivesofcontrollingshareholderstoexpropriateminorityinvestors.Theevidenceisconsistentwiththeviewthatownershipstructureplaysanimportantroleindeterminingwhetherinsidersexpropriateminorityshareholders.Usingasampleof144Israelifirms,BeniLauterbachandEfratTolkowsky2004findthatTobin'sQisimizedwhencontrolgroupvotereaches67%.Thisevidenceisstrongwhenownershipstructureistreatedasexogenousandweakwhenitisconsideredendogenous.ChristophKasererandBenjaminMoldenhauer2005addressthequestionwhetherthereisanyempiricalrelationshipbetweencorporateperformanceandinsiderownership.Usingadatasetof245Germenfirmsfortheyear2003theyfindevidenceforapositiveandsignificantrelationshipbetweencorporateperformance,asmeasuredbystockpriceperformanceaswellasbyTobin’sQ,andinsiderownership.KapopoulosandLazaretou2007triedthemodelofDemsetzandVillalonga2001for175Greekfirmsfortheyear2000andfoundthathigherfirmprofitabilityrequireslessdiffusedownershipstructureHealsoprovidesevidencethatlargenonmanagementblockholderscanmitigatethevaluationdiscountsassociatedwiththeexpectedagencyproblem.3.DataandMethodologyThestudyaimstoexplorethedisciplinaryeffectofthemarketinacontextwithconcentratedownershipstructureandweakinvestorprotection.ThepaperaimstoexploreiftherearedominantcertaintypesofownersofactivelylistedandtradedcompaniesonIndianStockExchanges.Further,itinvestigateswhethertheownershiptypeaffectssomekeyaccountingandmarketperformanceindicatorsoflistedfirms.ItshowsthattheremightbeotherreasonsthathaveaffectedtheperformanceofthelistedcompaniesofBSE100,otherthanownershipstructureThedatasetconsistsofdetailedtradingandfinancialinformationandindicatorsaboutthe98mostactivelytradedBSE100listedcompaniesontheBombayStockExchangeofIndiaBSEduring2009-2010.Theninetyeightcompaniescoverabroadspectrumofsectorsorindustriestotaling18,whichare:Finance,Oil&Gas,InformationTechnology,Metal,MetalProducts&Mining,CapitalGoods,FMCG,TransportEquipments,Power,HousingRelated,Healthcare,Telecom,Diversified,Chemical&Petrochemical,Miscellaneous,Media&Publishing,TransportServices,TourismandAgriculture.ThedetailsandproportionofthesesectorsinBSE100isgivenintable1.ThemainfinancialindicatorsobtainedfromthecompaniesfinancialstatementsincludedTotalRevenuesorTurnover,GrossProfit,NetIncomeorEarningsAfterTaxes,CurrentAssets,FixedAssets,LongTermDebtandShareholdersEquity.Finally,thethirdsubsetconsistsofcompanies’stockperformanceindicatorsobtainedfromCMIEPROWESSdatabaseincludingvaluetraded,volumetraded,numberoftransactions,marketcapitalization,marketpriceaswellassomecalculatedratiosusingbothCMIEPROWESSdatabaseaswellasitemsreportedinfinancialstatementsofsamplecompaniessuchasdebttoequityratio,returnonequity,returnonassets,priceearningsratioandpricetobookvalue.TheempiricalinvestigationisconductedusingknownOrdinaryLeastSquareEstimationmethodologyusingbothReturnonEquityROEandReturnonInvestmentROIvariables-representingaccountingperformancemeasures,andPrice-EarningRatioP/EandPricetoBookValueP/BV?representingstockmarketperformancemeasures;separatelyasdependentvariables.Thefollowingformulawasusedformodeling:Yijα+xff,j+xde,j+xdph,j+xfp,j+xnpi,j+xnpni,j+ε.iWhereε~ND0,σ2Yij:icorrespondstoROE,ROI,P/EorP/Bforcompanyjj198xff,j:representsthepercentageoffreefloatincompanyjcapitalstructure,xde,j:representsthedebttoequityratioforcompanyj,xdph,jandxfp,j:representsthedomesticpromoterandforeignpromoterholdinginthecompanyxnpi,jandxnpni,j:representsnonpromoterinstitutionalandnonpromoternoninstitutionalholdingofthecompany.TheindependentvariablesarerepresentedbythepercentageofFreeFloatedsharesFF,DebttoEquityratioD/Eandfourvariablesrepresentingpromotersandnonpromotersstakerepresentingtheownershipstructureinsampledcompanies,namely;Tables2and3,4and5intheappendixsummarizetheregressionanalysis.4.ResultsandanalysisThesampledcompaniesofBSE100wereanalyzedonthebasisoftheirfreefloatsandthefindingsaregivenbelowintable2.Table2clearlydepictthatmajorityofthesampledcompanieshavelessthan75%ofthefreefloat.Even13%companieshaveafreefloatoflessthan25%.Only13%ofthecompanieshaveafreefloatofgreaterthan75%.Tablethreegivesthedetailsabouttheownershipstructureofthesampledfirms.DataclearlydepictsthatthestakeofIndianpromotersIthesampledcompanyvariesfrom0%to99%withaaverageholdingof41%.ThatmeansonanaveragethesampledcompaniesaredominatedbyIndianpromoter’sholdings.Whiletheaverageforeignpromotersholdingisjust7.51%.ThatclearlyconfirmsthebeliefthattheIndiancompaniesaredominatedbyfamiliesandpromoter’sstakes.Datarelatedwithdebtequityprofileofsampledcompaniesisgivenintable4.Theresultsclearlyindicatesthatmajorityofthesampledcompaniesareinfirstcategoryof0-2whichclearlydepictsthatthemajorityofthesampledcompaniesarenothighlylevered.PerformancemeasuresinthepaperarerepresentedbytwosetsofvariablesaccountingmeasuresareROAandROEwhilethemarketmeasuresareP/EandP/BVratio.TablefivedepictsthataverageROE,ROA,P/EandP/BVvaluesare17.36%,12.77%,34.8and3.8respectivelyTheresultsofOLSregressionanalysisaregivenintable6below.Theempiricalresultsreflectat5%levelofsignificancetheownershipcharacteristicdoesnotreflectanyrelationshipwitheitheraccountingperformancemeasuresROAandROEorshowanysignificantrelationshipbetweenownershipstructureandstockmarketindicatorsP/EandP/BVratios,asshowninTable6below.Butat10%levelofsignificanceallsampledvariablesshowssignificantrelationshipwithROA,ROE,P/EandP/BVforperformanceofanycompany.Inserttable6abouthere5.FindingsandConclusionThesignificanceofownershipcharacteristicsandaccountingperformancemeasuresi.e.ROAandROEcouldbeexplainedbythefactthatthefundamentalevaluationofcompanies,measuredby,itsfinancialindicatorssuchasROAandROEarethemostimportantfactorsusedbyinvestorsinIndiatoassesscompany’sperformance.InIndia,althoughearlierinvestorshaveculturallyplacedmoreemphasisonaccountingperformancemea