Ownership Structure, Earnings Management and Investment Opportunity Set: Evidence from Mexican Firms
This paper analyses the influence of ownership, board of directors, and financial leverage on companies’ performance when these either face, or do not face, profitable growth opportunities. Towards that end we examined a sample of 83 listed Mexican firms during the period 2005-2011. The results conf...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Cognitione Foundation for the Dissemination of Knowledge and Science
2012-01-01
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| Series: | Journal of Entrepreneurship, Management and Innovation |
| Subjects: | |
| Online Access: |
http://jemi.edu.pl/uploadedFiles/file/all-issues/vol8/issue3/JEMI_Vol_8_Issue_3_2012_Article_3.pdf
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| _version_ | 1826905496735449088 |
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| author | Juan M. San Martin-Reyna Jorge A. Durán-Encalada |
| author_facet | Juan M. San Martin-Reyna Jorge A. Durán-Encalada |
| author_sort | Juan M. San Martin-Reyna |
| collection | DOAJ |
| description | This paper analyses the influence of ownership, board of directors, and financial leverage on companies’ performance when these either face, or do not face, profitable growth opportunities. Towards that end we examined a sample of 83 listed Mexican firms during the period 2005-2011. The results confirm the relevance of debt and board of directors in terms of firm market value by showing a negative relationship between performance and both, board of directors and leverage, in the presence of growth opportunities. In contrast, the relationship between debt and performance becomes positive when firms have no profitable investment projects. The results also demonstrate that the relevance of controlling shareholders on firm value is different when firms have or not growth opportunities. Therefore, our results show that ownership structure, composition and size of board and the level of leverage play a dual role on performance (increase or decrease the firm value) and determinewhether the firms have profitable investment projects. |
| first_indexed | 2024-03-09T09:11:11Z |
| format | Article |
| id | doaj.art-a0ce85274fa7472098b01675c036153c |
| institution | Directory Open Access Journal |
| issn | 2299-7326 |
| language | English |
| last_indexed | 2025-02-17T08:29:52Z |
| publishDate | 2012-01-01 |
| publisher | Cognitione Foundation for the Dissemination of Knowledge and Science |
| record_format | Article |
| series | Journal of Entrepreneurship, Management and Innovation |
| spelling | doaj.art-a0ce85274fa7472098b01675c036153c2025-01-02T22:24:36ZengCognitione Foundation for the Dissemination of Knowledge and ScienceJournal of Entrepreneurship, Management and Innovation2299-73262012-01-0183355710.7341/2012833Ownership Structure, Earnings Management and Investment Opportunity Set: Evidence from Mexican FirmsJuan M. San Martin-Reyna0Jorge A. Durán-Encalada1 Family Business Research Centre – Universidad de las Américas Puebla Family Business Research Centre – Universidad de las Américas Puebla This paper analyses the influence of ownership, board of directors, and financial leverage on companies’ performance when these either face, or do not face, profitable growth opportunities. Towards that end we examined a sample of 83 listed Mexican firms during the period 2005-2011. The results confirm the relevance of debt and board of directors in terms of firm market value by showing a negative relationship between performance and both, board of directors and leverage, in the presence of growth opportunities. In contrast, the relationship between debt and performance becomes positive when firms have no profitable investment projects. The results also demonstrate that the relevance of controlling shareholders on firm value is different when firms have or not growth opportunities. Therefore, our results show that ownership structure, composition and size of board and the level of leverage play a dual role on performance (increase or decrease the firm value) and determinewhether the firms have profitable investment projects. http://jemi.edu.pl/uploadedFiles/file/all-issues/vol8/issue3/JEMI_Vol_8_Issue_3_2012_Article_3.pdf debt nvestment opportunitiesperformancefamily business |
| spellingShingle | Juan M. San Martin-Reyna Jorge A. Durán-Encalada Ownership Structure, Earnings Management and Investment Opportunity Set: Evidence from Mexican Firms Journal of Entrepreneurship, Management and Innovation debt nvestment opportunities performance family business |
| title | Ownership Structure, Earnings Management and Investment Opportunity Set: Evidence from Mexican Firms |
| title_full | Ownership Structure, Earnings Management and Investment Opportunity Set: Evidence from Mexican Firms |
| title_fullStr | Ownership Structure, Earnings Management and Investment Opportunity Set: Evidence from Mexican Firms |
| title_full_unstemmed | Ownership Structure, Earnings Management and Investment Opportunity Set: Evidence from Mexican Firms |
| title_short | Ownership Structure, Earnings Management and Investment Opportunity Set: Evidence from Mexican Firms |
| title_sort | ownership structure earnings management and investment opportunity set evidence from mexican firms |
| topic | debt nvestment opportunities performance family business |
| url |
http://jemi.edu.pl/uploadedFiles/file/all-issues/vol8/issue3/JEMI_Vol_8_Issue_3_2012_Article_3.pdf
|
| work_keys_str_mv | AT juanmsanmartinreyna ownershipstructureearningsmanagementandinvestmentopportunitysetevidencefrommexicanfirms AT jorgeaduranencalada ownershipstructureearningsmanagementandinvestmentopportunitysetevidencefrommexicanfirms |