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Corporate governance, legal origin and firm performance: an Asian perspective
Jönköping University, Jönköping International Business School, JIBS, Economics, Finance and Statistics.
2012 (English)Doctoral thesis, comprehensive summary (Other academic)
Abstract [en]

This dissertation deals with corporate governance, legal origin and firm performance with a focus mainly on Asia. The dissertation consists of four individual papers and an introductory chapter. All papers can be read individually but share a common theme in corporate governance and investments. The main region of interest is Asia due to its special characteristics of ownership structures and governance. However, comparative studies of Asia and Europe as well as global outlooks are included in the dissertation too. The papers contribute to research by studying effects on investment performance, firm performance, capital allocation and capital structure from legal traditions, institutional indicators and ownership type.

The first paper focuses on family ownership which is found to affect firm performance negatively when using measures of firm valuation and returns, but investment performance positively when measured by marginal q. This suggest that family owned firms may be better at avoiding bad investments but at the same time have lower market valuation and returns to capital compared to firms with other owners.

The second paper investigates investment performance and firm size in terms of number of employees in 58 countries around the world. It is found that initial increase of staff size tend to positively affect investment performance overall, but excessive employment has a negative impact on investment performance.

The third paper studies the capital allocation in India after their economic reforms in the 1990s. It is found that allocation of capital has been slow to respond to reforms and firms face significant costs in adjusting their capital stock, leading to inefficient capital allocation.

The fourth paper deals with firm capital structure in 24 Asian and European countries. Both financial market indicators of maturity and firm specific characteristics influence the leverage of firms. Financial market maturity measures have a negative effect on debt levels as do family ownership of firms.

Place, publisher, year, edition, pages
Jönköping: Jönköping International Business School , 2012. , 147 p.
JIBS Dissertation Series, ISSN 1403-0470 ; 079
National Category
URN: urn:nbn:se:hj:diva-18176ISBN: 978-91-86345-31-0OAI: diva2:529791
Public defence
2012-06-08, B1014, Gjuterigatan 5, Jönköping, 10:00 (English)
Available from: 2012-06-05 Created: 2012-05-30 Last updated: 2012-06-08Bibliographically approved
List of papers
1. Promarket reforms and allocation of capital in India
Open this publication in new window or tab >>Promarket reforms and allocation of capital in India
2009 (English)Report (Other academic)
Abstract [en]

The government of India initiated pro-market reforms in the 1990s, after almost five decades of socialist planning. These and subsequent policy reforms are credited as the drivers of India’s radical economic transformation. Prior to reforms, private investment was strictly regulated and restricted to limited sectors. There have since been numerous changes in sectors important for investment, such as the bank sector, which affects outcomes of firm-level strategic decision making and investment behavior. By most estimates, India’s economy will continue to grow rapidly. The purpose of this paper is to investigate changes in investment behavior from the introduction of reforms to current conditions. Reforms changed several institutional frameworks for firm operations, allowing firms to pursue more competitive strategies. Given the importance of ownership in determining firm efficiency and access to capital, we examine the effect of ownership type, and also control for industry differences in capital allocation. We compute a measure of investment efficiency derived from the accelerator principle: Elasticity of capital with respect to output. We find that the allocation of capital has been slow to respond to reforms, indicating similar pace of firm responses. The findings suggest that firms face significant costs in adjusting their capital stock, which in turn leads to inefficient capital allocation. Surprisingly, we find no significant improvement over the 1991-2006 time period.

Place, publisher, year, edition, pages
Stockholm: , 2009. 28 p.
, Centre of Excellence for Science and Innovation Studies Working Paper, 206
Allocation of capital, India, institutional reforms, ownership
National Category
urn:nbn:se:hj:diva-11351 (URN)
Working Paper, CESISAvailable from: 2010-01-19 Created: 2010-01-19 Last updated: 2012-06-05Bibliographically approved

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