Proprietorship Structure and Firm Performance in the Context of Tunneling: An Empirical Analysis of Non-Financial Firms in Pakistan

Fiaz Ahmad Sulehri, Mohammad Ahmed and Amjad Ali
Additional contact information
Fiaz Ahmad Sulehri: Lahore School of Accountancy and Finance, The University of Lahore, Lahore, Pakistan
Mohammad Ahmed: Lahore School of Accountancy and Finance, The University of Lahore, Lahore, Pakistan

Journal of Policy Research (JPR), 2022, vol. 8, issue 4, 115-124

Abstract: This study has investigated the majority shareholder's practice to use minority shareholders’ wealth without their consent which influence the performance of firms in Pakistan from 2009 to 2020. The firm performance has been taken as an explained variable, whereas ownership concentration, inside ownership, firm size, leverage, and investment growth are considered explanatory variables. Descriptive statistics, correlation matrix, Hausman test, and random effect model have been used for empirical analysis. The study used a sample of 24 firms with a total of 288 observations to look at how ownership concentration, inside ownership, leverage, and sales growth affect firm performance. The ownership concentration, firm size, and investment growth have a positive and significant impact on firm performance, whereas inside ownership and leverage have a negative and significant influence on the performance of selected non-financial firms. The larger the gap between ownership and control, the more likely it is that company resources will be tunneled. So, it has been suggested to the securities and exchange commission of Pakistan to frame strict rules and regulations to stop the role of inside ownership because it influences firm performance adversely.

Keywords: firm performance; insider ownership; tunneling (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

Downloads: (external link)
https://jprpk.com/index.php/jpr/article/view/136/187 (application/pdf)
https://jprpk.com/index.php/jpr/article/view/136 (text/html)

Related works:
Working Paper: Proprietorship Structure and Firm Performance in the Context of Tunneling: An Empirical Analysis of Non-Financial Firms in Pakistan (2022)
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:rfh:jprjor:v:8:y:2022:i:4:p:115-124

Access Statistics for this article

Journal of Policy Research (JPR) is currently edited by Dr. Muhammad Irfan Chani

More articles in Journal of Policy Research (JPR) from Research Foundation for Humanity (RFH) Contact information at EDIRC.
Bibliographic data for series maintained by Dr. Muhammad Irfan Chani ().