Controlling shareholders, board structure, and firm performance: Evidence from India

Melvin Jameson, Andrew Prevost and John Puthenpurackal

Journal of Corporate Finance, 2014, vol. 27, issue C, 1-20

Abstract: We examine the prevalence and performance impact of controlling shareholders and study corporate board structures and ownership structures in 1796 Indian firms. Families (founders) are present on the boards in 63.2 (65.5) percent of the sample firms. On average, founders own over 50% of outstanding shares. In contrast to the findings of Anderson and Reeb (2003) in the U.S. context, we find that controlling shareholder board membership in Indian firms has a statistically significant negative association with Tobin's Q. Higher proportion of independent directors, higher institutional ownership or larger firm size does not appear to mitigate this relationship. Overall, board membership of controlling shareholders appears to be costly for minority shareholders.

Keywords: Controlling shareholders; Family control; Board structure; Corporate governance; India (search for similar items in EconPapers)
JEL-codes: G30 G32 G34 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (43)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:corfin:v:27:y:2014:i:c:p:1-20

DOI: 10.1016/j.jcorpfin.2014.04.003

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