Ownership Structure, Earnings Management and Investment Opportunity Set: Evidence from Mexican Firms

Juan M. San Martin-Reyna () and Jorge A. Durán-Encalada ()
Additional contact information
Juan M. San Martin-Reyna: Family Business Research Centre – Universidad de las Américas Puebla
Jorge A. Durán-Encalada: Family Business Research Centre – Universidad de las Américas Puebla

Journal of Entrepreneurship, Management and Innovation, 2012, vol. 8, issue 3, 35-57

Abstract: This paper analyses the influence of ownership, board of directors, and financial leverage on companies’ performance when these either face, or do not face, profitable growth opportunities. Towards that end we examined a sample of 83 listed Mexican firms during the period 2005-2011. The results confirm the relevance of debt and board of directors in terms of firm market value by showing a negative relationship between performance and both, board of directors and leverage, in the presence of growth opportunities. In contrast, the relationship between debt and performance becomes positive when firms have no profitable investment projects. The results also demonstrate that the relevance of controlling shareholders on firm value is different when firms have or not growth opportunities. Therefore, our results show that ownership structure, composition and size of board and the level of leverage play a dual role on performance (increase or decrease the firm value) and determinewhether the firms have profitable investment projects.

Keywords: debt; nvestment opportunities; performance; family business (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://jemi.edu.pl/uploadedFiles/file/all-issues/v ... 3_2012_Article_3.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aae:journl:v:8:y:2012:i:3:p:35-57

DOI: 10.7341/2012833

Access Statistics for this article

More articles in Journal of Entrepreneurship, Management and Innovation from Fundacja Upowszechniająca Wiedzę i Naukę "Cognitione"
Bibliographic data for series maintained by Anna Ujwary-Gil ().