Simultaneous Equations and Endogeneity in Corporate Finance: The Linkage between Institutional Ownership and Corporate Financial Performance

• 발행기관: 한국유통과학회
• 저자명: Qaisar Ali MALIK Shahzad HUSSAIN Naeem ULLAH Abdul WAHEED Muhammad NAEEM Muhammad MANSOOR
• 간행물 정보: 『The Journal of Asian Finance, Economics and Business(JAFEB)』Vol. 8 No.3, 69~77쪽, 전체 9쪽
• 주제분류: 경제경영 > 경제학
• 파일형태: PDF
• 발행일자: 2021.03.30

영문 초록

The objective of this research is to explore the inconclusive theoretical and empirical association between institutional ownership and firm performance in the context of emerging Pakistani economy. The data set consists of all the non-financial firms listed on the Pakistan Stock Exchange (PSX). Annual data set covers the period ranging from 2010 to 2015. However, the econometric analysis does not include those firms with incomplete data. Thus the final data set comprised of an unbalanced panel of sample of 276 firms with 1231 firms years observations. Data related to the institutional ownership and other variables taken for the study were extracted through the annual financial reports of the firms. The research used Tobin’s Q as a proxy of market measure of firm performance and tested the endogenous relation with institutional ownership through OLS and 2SLS approach. The study also applied Durbin–Wu–Hausman test to determine the endogeneity before analyzing the 2SLS model. The Durbin-Wu-Hausman Test (DWH) conform the endogenous link between institutional ownership and performance and vice versa. The results derived from 2SLS also confirm a highly significant relationship and two way direct proportional relationships between the institutional investment and corporate performance in the studied companies.

목차

1. Introduction

2. Literature Review

3. Research Methodology

4. Data Analysis & Discussion

5. Conclusion

References

키워드

Institutional Ownership Corporate Performance Endogeneity Firm Size Tobin’s Q