Ownership Structure and Publicness of Firms: A Literature Review

Wisnu Untoro

Abstract


There has been an extensive body of literature studying the link between ownership structure and firm performance. Some of them focus on the performance difference across ownership types (i.e. state vs foreign vs private domestic). On the other hand, some studies stress ownership structure on the fraction of ownership based on agency theory (i.e. majority versus minority) and its derivatives (e.g. ultimate ownership, cross-listing). However, an important element has not been explored while discussing the ownership structure of firms which is the concept of the publicness of firms. Publicness is important to explain to which extent an organization is related to governmental institutions. In fact, there are many engagements of firms with governmental bodies (e.g. deposit and lending from and to the public organization). In this present paper, I provide a comprehensive literature review on the intersection between the publicness level of firms and ownership structure. Going deeper, I also provide a literature review on the measurement of publicness and postulate a model to link between these two and firm performance as a venue for future studies.

DOI: https://doi.org/10.26905/jkdp.v21i4.1560


Keywords


Agency Theory; Firm Performance; Ownership Structure; Political Relatedness; Publicness

Full Text:

PDF

References


Agrawal, A., & Knoeber, C. R. (2001). Do some outside directors play a political role? Journal of Law and Economics, 44(1), 179-198.

Anderson, S. (2012). Public, private, neither, both? Publicness theory and the analysis of healthcare organisations. Social Science & Medicine, 74(3), 313-322.

Aulich, C. (2010). It’s not ownership that matters: it’s publicness. Journal Policy Studies, 32(3), 199-213.

Bae, K. H., Kang, J. K., & Kim, J. M. (2002). Tunnelling or value added? Evidence from mergers by Korean business groups. Journal of Finance, 57(6), 2695–2740.

Baek, J. S., Kang, J. K., & Lee, I. (2006). Business groups and tunnelling: evidence from private securities offerings by Korean chaebols. Journal of Finance, 61(5), 2415–2449.

Bhaumik, S. K., & Gregoriu, A. (2010). ‘Family’ ownership, tunnelling, and earnings management: A review of the literature. Journal of Economic Surveys, 24(4), 705-730.

Boyne, G. A. (2002). Public and private management: what’s the difference? Journal of Management Studies, 39(1), 97-122.

Bozeman, B. (1987). All organizations are public: bridging public and private organizational theories. San Fransisco: Jossey-Bass Publishers.

Bozeman, B., & Bretschneider, S. (1994). The "publicness puzzle" in organization theory: A test of alternative explanations of differences between public and private organizations. Journal of Public Administration Research and Theory, 4(2), 197-223.

Claessens, S., Kunt, D. A., & Huizinga, H. (2001). How does foreign entry affect domestic banking markets? Journal of Banking & Finance, 25(5), 891-911.

Detragiache, E., Tressel, T., & Gupta, P. (2008). Foreign banks in poor countries: Theory and evidence. Journal of Finance, 63(5), 2123-2160.

Dewenter, J. L., & Malatesta, P. H. (2001). State-owned and privately owned firms: An empirical analysis of profitability, leverage, and labor intensity. The American Economic Review, 91(1), 320-334.

Dinc, S. I. (2005). Politicians and banks: Political influences on government-owned banks in emerging markets. Journal of Financial Economics, 77(2), 453–479.

Feeney, M. K., & Welch, E. W. 2012. Realized publicness at public and private research universities. Public Administration Review, 72(2), 272–284.

Frederickson, H. G., Rainey, H. G., Backoff R. W., & Levine, C. H. (1976). Comparing public and private organizations. Public Administration Review, 36(2), 233-244.

Goldeng, E., Grünfeld, L. A., & Benito, G. R. G. (2008). The performance differential between private and state owned enterprises: The roles of ownership, management, and market structure. Journal of Management Studies, 45(7), 1244-1273.

Goldstein, S. M., & Naor, M. (2005). Linking publicness to operations management practices: A study of quality management practices in hospitals. Journal of Operations Management, 23(20), 209–228.

Jensen, M. C., & Meckling, W. H. (1976). Theory of the firm: Managerial behavior, agency costs, and ownership structure. Journal of Financial Economics, 3(4), 305–360.

La Porta, R., Lopez-de-Silanes, F., & Shleifer, A. (2002). Government ownership of banks. Journal of Finance, 57(1), 265-301.

Lepetit, L., Saghi-Zedek, N., & Tarazi, A. 2015. Excess control rights, bank capital structure adjustments, and lending. Journal of Financial Economics, 115(3), 574-591.

Nutt, P. C., & Backoff, R. W. (1993). Organizational publicness and its implications for strategic management. Journal of Public Administration Research and Theory, 3(2): 209-231.

Nys, E., Tarazi, A., & Trinugroho, I. (2015). Political connections, bank deposits, and formal deposit insurance. Journal of Financial Stability, 19, 83–104.

Paget-Seekins, L., & Tironi, M. (2016). The publicness of public transport: The changing nature of public transport in Latin American cities. Transport Policy, 49, 176–183.

Prabowo, M. A., Untoro, W., Trinugroho, I., & Angriawan, A. (2014). State-owned enterprises, efficiency, and performance: The case of Indonesia. International Business Management, 8(2), 153-158.

Shleifer, A., & Vishny, R. W. (1994). Politicians and firms. Quarterly Journal of Economics, 46, 995-1025.

Sutopo, B., Trinugroho, I., & Damayanti, S. M. (2017). Politically connected banks: Some Indonesian evidence. International Journal of Business and Society, 18(1), 83-94.

Untoro, W., & Angriawan, A. (2016). Publicness and strategic planning of public institutions: Evidence from Indonesia. Journal of Economics, Business, and Accountancy VENTURA, 19(2), 155-160.

Untoro, W. (2016). Government-Controlled firms: Recent discussion and future research direction. Jurnal Manajemen, 6(2).

Wu, W., Wu, C., & Rui, O. M. (2010). Ownership and the value of political connections: Evidence from China. European Financial Management, 18(4), 695-729.




DOI: https://doi.org/10.26905/jkdp.v21i4.1560

Refbacks

  • There are currently no refbacks.


Bookmark and Share


Jurnal Keuangan dan Perbankan (Journal of Finance and Banking)

Diploma Program of Banking and Finance, Faculty of Economics and Business, University of Merdeka Malang

Published by University of Merdeka Malang

Mailing Address:
2nd floor Finance and Banking Building, Jl. Terusan Raya Dieng No. 57 Malang, East Java, Indonesia
Phone: -
Email: [email protected]

This work is licensed under a Creative
Commons Attribution-ShareAlike 4.0