The effects of ownership structure on corporate value in Tehran Stock Exchange

Abstract: In the present study, the separate and simultaneous role of concentration and type of ownership on corporate value is investigated. In this study, the ownership structure is classi?ed into four classes: the institutional ownership, the corporate ownership, the management ownership and the foreign ownership. In addition, di?erent attitudes regarding the above ownership are also tested, that is, active monitoring hypothesis and interest convergence hypothesis. Since, in the sample research no information was found about foreign ownership, this type of ownership was not examined. However, in the case of the other ownerships, a separated hypothesis was developed based on various techniques and their in?uence on the corporate value was examined. For each hypothesis, a multiple linear regression model is de?ned based on the dependent variables. Companies listed in securities exchange commission of Iran makes up the statistical community of present study and the sample consists of 90 companies during 2002-2008. Two types of tests, including correlation test and cross multiple regression test are implemented to examine the hypothesis. Generally, the results reflect no signi?cant relationship between the concentration of ownership and the corporate value. The results of the study show that, while there is no relationship between the institutional ownership and management ownership and the corporate value, there is a signi?cant relationship between the corporate ownership and the corporate value.

How to cite this paper

 Osta, S & Naderi, H. (2012). The effects of ownership structure on corporate value in Tehran Stock Exchange.Management Science Letters , 2(4), 1341-1348.

Refrences

Barberies, N. Boyocho, M. shleifer, A., & Tsukanova, N. (1996). How does privatization work? Evidence from Russian shops. Journal of Political Economy, 104(4), 764-790.

Bushee, B.J. (1998). The Influence of Institutional Investors on Myopic R & D Investment Behavior. Accounting Review, 73, 305-333.

Chapelle, A. (2004). Block investments and the race for corporate control in Belgium. Center Emile Bernheim, Research Institute in Management Sciences.

de Miguel, A., Pindado, J., & de la Torre, C. (2003). How Does Ownership Structure Affect Firm Value? A Comparison Using Different Corporate Governance Systems. Social Science Research Network.

Deb, S. S., & Chaturvedula, C. V. (2003). Ownership Structure and Firm Value: Empirical Study on Corporate Governance System of Indian Firms.

Earle, J.S. (1998). Post-Privatization Ownership Structure and Productivity in Russian Industrial Enterprises. Site Working paper, No127. Stockholm School of Economics.

Kim, W., Black, B.S., & Jang, H. (2006). Does corporate governance predict firms & apos; market values? Evidence from Korea. Journal of Law, Economics, and Organization, 22(2), 660-691.

Kocenda, E, & Svejnar, J. (2002). The Effects of Ownership From and Concentration on Firm Performance after Large-scale Privatization. William Davidson Institute Working paper. N471

Kumar, J. (2004). Does Ownership Structure Influence Firm Value?: Evidence from India. India Gandhi Institute of Development Researches India.

Lins, K. V., & Lemmon, M. L. (2001). Ownership structure, corporate governance, and firm value: Evidence from the East Asian financial crisis. William Davidson Institute Working Paper No. 393; 3rd Annual Financial Marketing Development Conference, Hong Kong.

Jensen, M.C. (1993). The modern industrial revolution, exit and the failure of internal control systems. Journal of Finance, 48, 830-870.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs and ownership structure. Journal of Financial Economics, 3, 305-360.

Morck, R., Shleifer, A., & Vishny, R. (1998). Management Ownership and Market valuation. Journal of Financial Economics, 20, 290-300.

Shahira, A. S. (2003). Does Ownership Structure affect Firm value: Evidence from the Egyptian Stock Market. Cario & Alexandria Stock Exchanges.

Shleifer, A., & Vishny, R. (1986). Large shareholders and corporate control. Journal of political Economy, 94, 460-480.

Velury, U., & Jenkins, D.S. (2006). Institutional Ownership and the Quality of Earnings. Journal of Business Research, 59, 1043-1051.

Journals

MSL Volumes

Keywords

Authors

Countries

Management Science Letters

The effects of ownership structure on corporate value in Tehran Stock Exchange Pages 1341-1348 Download PDF

Add Reviews