Agency Theory and Firm Value in India

DOES OWNERSHIP STRUCTURE INFLUENDE VALUE? EVIDENCE FROM INDIA: STUDIES ON INSTITUTIONS & DEVELOPMENT PERFORMANCE, Mohamed Nagy Eltony, ed., Arab Planning Institute – Kuwait, 2005

44 Pages Posted: 19 Feb 2004 Last revised: 24 Nov 2023

See all articles by Jayesh Kumar

Jayesh Kumar

Kotak Securities; Manappuram Finance Limited

Date Written: January 1, 2004

Abstract

This paper examines empirically the effects of ownership structure on the firm performance for a panel of Indian corporate firms, from an 'agency perspective'. We examine the effect of interactions between corporate, foreign, institutional, and managerial ownership on firm performance. Using panel data framework, we show that a large fraction of crosssectional variation, in firm performance, found in several studies, can be explained by unobserved firm heterogeneity. We provide some evidence that the shareholding by institutional investors and managers affect firm performance non-linearly, after controlling for observed firm characteristics and unobserved firm heterogeneity. We find no evidence in favor of endogeneity of shareholding pattern.

Keywords: Corporate governance, Shareholding pattern, Firm performance, Panel Data, India

JEL Classification: G32, G34

Suggested Citation

Kumar, Jayesh and Kumar, Jayesh, Agency Theory and Firm Value in India (January 1, 2004). DOES OWNERSHIP STRUCTURE INFLUENDE VALUE? EVIDENCE FROM INDIA: STUDIES ON INSTITUTIONS & DEVELOPMENT PERFORMANCE, Mohamed Nagy Eltony, ed., Arab Planning Institute – Kuwait, 2005, Available at SSRN: https://ssrn.com/abstract=501802 or http://dx.doi.org/10.2139/ssrn.501802

Jayesh Kumar (Contact Author)

Manappuram Finance Limited ( email )

Valapad
Thrissur, 680567
India

Kotak Securities ( email )

Mumbai
Mumbai, 400050
India

HOME PAGE: http://www.kotaksecurities.com

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