Explicating the contextuality of corporate governance through ownership structure and family management: Evidence from an emerging economy

Hasan, Arshad; Riaz, Zahid; Nakpodia, Franklin

Abstract

Purpose - This research investigates the impact of family management and ownership structure, including foreign ownership and business group ownership, on corporate performance. Design/methodology/approach - Employing an agency perspective and a quantitative research methodology, this study examines listed firms in Pakistan from 2009-2018. Findings - The results suggest that family management and concentrated leadership constrain, while family leadership, foreign ownership and group ownership strengthen monitoring effectiveness and corporate performance. These findings imply that the shareholder governance logic offers optimal solutions in an emerging economy, as relational governance may activate agency problems. Originality - Our findings are consistent with the relevance of relational governance mechanisms in the form of family leadership. However, the results suggest that emerging economies require a hybrid governance model to address their unique agency problems, thereby underlining context relevance in corporate governance scholarship. Furthermore, this research adopts a thick view of institutions to clarify institutional embeddedness and corporate governance contextuality in an emerging economy.

Citation

Hasan, A., Riaz, Z., & Nakpodia, F. (2023). Explicating the contextuality of corporate governance through ownership structure and family management: Evidence from an emerging economy. Corporate Governance, 23(5), 1085-1104. https://doi.org/10.1108/cg-08-2022-0332

• Journal Article Type: Article
• Acceptance Date: Dec 30, 2022
• Online Publication Date: Jan 27, 2023
• Publication Date: Jun 29, 2023
• Deposit Date: Jan 5, 2023
• Publicly Available Date: Jul 25, 2023
• Journal: Corporate Governance
• Print ISSN: 1472-0701
• Publisher: Emerald
• Peer Reviewed: Peer Reviewed
• Volume: 23
• Issue: 5
• Pages: 1085-1104
• DOI: https://doi.org/10.1108/cg-08-2022-0332
• Public URL: https://durham-repository.worktribe.com/output/1185971