{"title":"How does firm size explain cross-country differences in ownership concentration?","authors":"Fariborz Moshirian , Thuy Thi Nguyen , Bohui Zhang","doi":"10.1016/j.mulfin.2022.100737","DOIUrl":null,"url":null,"abstract":"<div><p>While a number of studies have examined ownership structure across countries, the literature has not yet reached a consensus as to how and why ownership concentration and the size sensitivity of ownership concentration vary across countries. Using a sample of 18,932 firms across 40 countries, we find that there is a negative relationship between firm size and ownership concentration and thus lower ownership concentration in countries with a high quality of governance. Meanwhile, in countries with weak governance, ownership concentration persists even as firms get larger. Our findings support the theory that a firm’s choice of optimal ownership structure depends on its quality of governance, which includes both vertical and horizontal governance. Our study also finds that civic capital, including ethical values, contribute to the variation of ownership structure across countries. The findings also potentially reconcile the currently conflicting empirical results in studies of ownership concentration around the world.</p></div>","PeriodicalId":47268,"journal":{"name":"Journal of Multinational Financial Management","volume":null,"pages":null},"PeriodicalIF":2.9000,"publicationDate":"2022-09-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Multinational Financial Management","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1042444X22000081","RegionNum":3,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q2","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
While a number of studies have examined ownership structure across countries, the literature has not yet reached a consensus as to how and why ownership concentration and the size sensitivity of ownership concentration vary across countries. Using a sample of 18,932 firms across 40 countries, we find that there is a negative relationship between firm size and ownership concentration and thus lower ownership concentration in countries with a high quality of governance. Meanwhile, in countries with weak governance, ownership concentration persists even as firms get larger. Our findings support the theory that a firm’s choice of optimal ownership structure depends on its quality of governance, which includes both vertical and horizontal governance. Our study also finds that civic capital, including ethical values, contribute to the variation of ownership structure across countries. The findings also potentially reconcile the currently conflicting empirical results in studies of ownership concentration around the world.
期刊介绍:
International trade, financing and investments have grown at an extremely rapid pace in recent years, and the operations of corporations have become increasingly multinationalized. Corporate executives buying and selling goods and services, and making financing and investment decisions across national boundaries, have developed policies and procedures for managing cash flows denominated in foreign currencies. These policies and procedures, and the related managerial actions of executives, change as new relevant information becomes available. The purpose of the Journal of Multinational Financial Management is to publish rigorous, original articles dealing with the management of the multinational enterprise. Theoretical, conceptual, and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • Foreign exchange risk management • International capital budgeting • Forecasting exchange rates • Foreign direct investment • Hedging strategies • Cost of capital • Managing transaction exposure • Political risk assessment • International working capital management • International financial planning • International tax management • International diversification • Transfer pricing strategies • International liability management • International mergers.