Open Access
Subscription Access
Open Access
Subscription Access
The Relationship between Foreign Ownership and Firm Performance in India:An Empirical Analysis
Subscribe/Renew Journal
The paper examines the impact of foreign ownership (foreign promoter, foreign corporate shareholding and foreign institutional investors) on firm performance. The empirical analysis is done on the panel data of 145 non-financial NSE listed companies for a period of five years, i.e., from 2008-2012. Firm performance has been measured using market based measure Tobin’s Q and accounting based measures Return on Assets (ROA) and Return on Equity (ROE). Multiple regression analysis is done using Pooled OLS and Panel Data-Random Effect Model. Foreign ownership is found to have a positive and significant impact on firm performance measures under Pooled OLS model, but the impact is found only positive in Random Effect Regression. The relationship between foreign corporate ownership and firm performance is positive and significant at varying level of significance. Foreign institutional ownership is found to have an ambiguous relationship with different firm performance measures used.
Subscription
Login to verify subscription
User
Font Size
Information
- Chhibber, P.K. and S.K. Majumdar (1999), Foreign Ownership and Profitability: Property Rights, Control, and the Performance of Firms in Indian Industry, The Journal of Law and Economics, 42(1): 209-238.
- Choi, S.B., B.I.ParkandP. Hong (2012), Does Ownership Structure Matter for Firm Technological Innovation Performance? The Case of Korean Firms, Corporate Governance: An International Review, 20(3): 267-288.
- Douma, S., R. George, and R. Kabir (2006), Foreign and Domestic Ownership, Business Groups, and Firm Performance: Evidence from a Large Emerging Market, Strategic Management Journal, 27(7): 637-657.
- Gedajlovic, E., T. Yoshikawa and M. Hashimoto (2005), Ownership Structure, Investment behaviour and Firm Performance in Japanese Manufacturing Industries, Organization Studies, 26(1): 7-35.
- Gurbuz, A.O., A.Aybars, and O.Kutlu (2010), Corporate Governance and Financial Performance with a Perspective on Institutional Ownership: Empirical Evidence from Turkey, Journal of Applied Management Accounting Research, 8(2): 21.
- Khanna, T., and K. Palepu (2000), Emerging Market Business Groups, Foreign Intermediaries, and Corporate Governance, In Concentrated Corporate Ownership, pp. 265-294, University of Chicago Press.
- Kumar, J. (2004), Does Ownership Structure Influence Firm Value? Evidence from India, Journal of Entrepreneurial Finance and Business Ventures, 9(2): 61-93.
- Pant, M., and M. Pattanayak (2010), Corporate Governance, Competition and Firm Performance: Evidence from India, Journal of Emerging Market Finance, 9(3): 347-381.
- Phung, D.N., and T.P.V. Le (2013), Foreign Ownership, Capital Structure and Firm Performance: Empirical Evidence from Vietnamese Listed Firms, IUP Journal of Corporate Governance, 12(2): 40.
- Sarkar, J., and S. Sarkar (2000), Large Shareholder Activism in Corporate Governance in Developing Countries: Evidence from India, International Review of Finance, 1(3): 161-194.
- Yudaeva, K., K. Kozlov, N. Melentieva, and N.Ponomareva (2003), Does Foreign Ownership Matter?, Economics of Transition, 11(3): 383-409.
Abstract Views: 712
PDF Views: 3