The influence of ultimate ownership concentration on leverage
This paper investigates the relationship between ultimate ownership concentration and the extent of leverage in the context of Malaysia. The data of this study include 478 publicly listed firms from2001 to 2012. The results show that ultimate ownership concentration has U-shaped relationship with le...
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Penerbit Universiti Kebangsaan Malaysia
2016
|
| Online Access: | http://journalarticle.ukm.my/10810/ http://journalarticle.ukm.my/10810/1/10796-48412-1-PB.pdf |
| _version_ | 1848812513786855424 |
|---|---|
| author | Hong, Kok Chee Hooy, Chee-Wooi Ooi, Chai-Aun |
| author_facet | Hong, Kok Chee Hooy, Chee-Wooi Ooi, Chai-Aun |
| author_sort | Hong, Kok Chee |
| building | UKM Institutional Repository |
| collection | Online Access |
| description | This paper investigates the relationship between ultimate ownership concentration and the extent of leverage in the context of Malaysia. The data of this study include 478 publicly listed firms from2001 to 2012. The results show that ultimate ownership concentration has U-shaped relationship with leverage, with the turning point being at the ownership concentration of 42%. Based on signalling theory, the results show that a moderate extent of ultimate ownership concentration tends to adopt lower leverage for they have higher incentives to self-monitor managerial opportunistic decision making; by contrast, an ultimate owner who holds excessively high concentration of shareholdings shows self-benefitting behaviour, with the owner tending to adopt higher leverage to sustain the loss of firm value from expropriation. However, higher institutional ownership concentration plays a significant monitoring role over the owner’s opportunistic behaviour through the signalling of lower leverage even when the shareholding of ultimate owner is excessively large. |
| first_indexed | 2025-11-15T00:03:30Z |
| format | Article |
| id | oai:generic.eprints.org:10810 |
| institution | Universiti Kebangasaan Malaysia |
| institution_category | Local University |
| language | English |
| last_indexed | 2025-11-15T00:03:30Z |
| publishDate | 2016 |
| publisher | Penerbit Universiti Kebangsaan Malaysia |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | oai:generic.eprints.org:108102017-10-11T07:54:38Z http://journalarticle.ukm.my/10810/ The influence of ultimate ownership concentration on leverage Hong, Kok Chee Hooy, Chee-Wooi Ooi, Chai-Aun This paper investigates the relationship between ultimate ownership concentration and the extent of leverage in the context of Malaysia. The data of this study include 478 publicly listed firms from2001 to 2012. The results show that ultimate ownership concentration has U-shaped relationship with leverage, with the turning point being at the ownership concentration of 42%. Based on signalling theory, the results show that a moderate extent of ultimate ownership concentration tends to adopt lower leverage for they have higher incentives to self-monitor managerial opportunistic decision making; by contrast, an ultimate owner who holds excessively high concentration of shareholdings shows self-benefitting behaviour, with the owner tending to adopt higher leverage to sustain the loss of firm value from expropriation. However, higher institutional ownership concentration plays a significant monitoring role over the owner’s opportunistic behaviour through the signalling of lower leverage even when the shareholding of ultimate owner is excessively large. Penerbit Universiti Kebangsaan Malaysia 2016 Article PeerReviewed application/pdf en http://journalarticle.ukm.my/10810/1/10796-48412-1-PB.pdf Hong, Kok Chee and Hooy, Chee-Wooi and Ooi, Chai-Aun (2016) The influence of ultimate ownership concentration on leverage. Jurnal Pengurusan, 47 . pp. 55-65. ISSN 0127-2713 http://ejournal.ukm.my/pengurusan/issue/view/856 |
| spellingShingle | Hong, Kok Chee Hooy, Chee-Wooi Ooi, Chai-Aun The influence of ultimate ownership concentration on leverage |
| title | The influence of ultimate ownership concentration on leverage |
| title_full | The influence of ultimate ownership concentration on leverage |
| title_fullStr | The influence of ultimate ownership concentration on leverage |
| title_full_unstemmed | The influence of ultimate ownership concentration on leverage |
| title_short | The influence of ultimate ownership concentration on leverage |
| title_sort | influence of ultimate ownership concentration on leverage |
| url | http://journalarticle.ukm.my/10810/ http://journalarticle.ukm.my/10810/ http://journalarticle.ukm.my/10810/1/10796-48412-1-PB.pdf |