Ownership concentration, foreign ownership and corporate performance among the listed companies in East African community: the role of quality institutions

Bilali Basesa Jumanne and Chee-Keong Choong

African Journal of Accounting, Auditing and Finance, 2018, vol. 6, issue 1, 70-90

Abstract: This study examines the role of institutions to stimulate the relationship between foreign ownership and corporate performance for the panel data of 58 non-financial listed firms in EAC over 2007-2015. The panel unit root tests by Im-Pesaran-Shin and Fisher-ADF confirm that data are stationary and are also cointegrated according to Pedroni tests. The regression output using GMM estimator reveals that ownership concentration is negative and statistically significant determinant of corporate performance. Moreover, the significant positive relationship between the interaction term (foreign ownership and institution) and corporate performance indicates that quality institutions stimulate foreign ownership towards superior corporate performance and the protection of minority shareholders. Acknowledging the importance of minority shareholders for capital market development and economic output, this study recommends to the authorities to enforce ownership structure diversity and enforce quality institutions for accelerating the catching up of the potential foreign shareholders towards economic growth.

Keywords: ownership concentration; foreign ownership; quality institutions; corporate performance; panel data; East African community; EAC. (search for similar items in EconPapers)
Date: 2018
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://www.inderscience.com/link.php?id=91141 (text/html)
Access to full text is restricted to subscribers.

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:ids:ajaafi:v:6:y:2018:i:1:p:70-90

Access Statistics for this article

More articles in African Journal of Accounting, Auditing and Finance from Inderscience Enterprises Ltd
Bibliographic data for series maintained by Sarah Parker ().