CORPORATE GOVERNANCE THROUGH OWNERSHIP STRUCTURE: EVIDENCE FROM KSE-100 INDEX

Safdar Hussain Tahir, Aqsa Shabbir, Dr. Bilal Aziz

Abstract


The study investigates the relationship between ownership structure, firm performance and dividend policy with respect to Governance perspective of companies listed in Karachi Stock Exchange (KSE). A sample of 45 Non-financial KSE-100 Index listed firms for a period spanning from 2010 to 2013 is taken for analysis of the study. Multiple Regression Models are applied on the panel data to measure the impact of ownership structure on firm performance and dividend policy. The empirical results provide evidence that ownership structure significantly affects the firm performance and dividend policy in connection with family ownership concentration. The empirical results also exhibit a significant negative relation between ownership concentration and Dividend payments and support the Entrenchment Theory; it means the major shareholders protect their own benefit at the cost of minor stakeholders. The results also show a positive relation of firm performance with foreign holdings; it means better performance is an attractive sign for the foreign investment and financial health of the economy.


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ISSN : 2251-1555