Corporate Governance in Bangladesh: Link between Ownership and Financial Performance

Omar Al Farooque, Tony Van Zijl, Keitha Dunstan and Waresul Karim Akm

Corporate Governance: An International Review, 2007, vol. 15, issue 6, 1453-1468

Abstract: This paper investigates empirically the effect of board ownership on firm performance in Bangladesh. By estimating single equation and simultaneous equation models on an unbalanced pooled sample of listed firms, it offers some new insight into the ownership‐performance link in Bangladesh. Building on extant literature, it examines the ownership‐performance relationship in an emerging market economy considering ownership as exogenous and as endogenous. The latter approach is favoured as recent empirical evidence shows that ownership and performance are endogenously determined and there is either a reverse‐way or two‐way causality relationship between the two. While OLS regression analysis indicates a linear and non‐linear relationship between board ownership and performance, this disappears when 2‐SLS estimation of a simultaneous equation model is carried out. Instead, a reverse causality relationship emerges. Other governance and control variables appear to have effects consistent with the literature. These results suggest a need to strengthen the internal control mechanisms within listed firms in Bangladesh.

Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (41)

Downloads: (external link)
https://doi.org/10.1111/j.1467-8683.2007.00657.x

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:bla:corgov:v:15:y:2007:i:6:p:1453-1468

Ordering information: This journal article can be ordered from
http://www.blackwell ... ref=0964-8410&site=1

Access Statistics for this article

Corporate Governance: An International Review is currently edited by William Judge

More articles in Corporate Governance: An International Review from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().