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38663

Does Accounting Disclosure of Ordinary Free Float, Investment Held and Strategic Ownership Matters for Corporate Financial Policies and Performance?

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Last updated: 04 Jan 2025

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Abstract

This empirical research is the first which examine the relationship of "ownership structure-performance-leverage-dividend". Thus this research aims to observe the link between these variables for the interest of shareholders, potential investors, and managers. The ownership structure of a firm is examined for its link with its performance, capital structure and other decision making.
In this research paper, the main aims are to identify and explore the accounting disclosure of three defined ownership structure, the public ordinary ownership (free float shares) (FF), the strategic (managerial) ownership (SS), and the investment held ownership (IH) and also seek toinvestigate and examine how the ownership structure of companies influence corporate financial performance (profitability and liquidity), leverage and dividend policy using earnings per share (EPS), total assets (TA) and industry type (IND) as control variables.
Data used in the analysis were collected from the annual financial statements. dimensions. In the reserach the time series data of different variables related to Ownership structure, firm's performance and dividend policy of the companies is used. Four multiple linear regression analysis are used to test the research hypotheses. The sample used examines the effect of three types of ownership structure of companies other than financial ones as independent variables on return on equity ratio, current ratio, debt/equity ratio, dividend yield ratio as dependent variables of 116 companies listed on the Egyptian Stock Exchange between 2012-2017.
According to regression analysis, the results showed that there is a significant positive relationship between ROE and the three types of ownership structure (FF, IH, SS) and also with the EPS and it is found that the relationship between liquidity measured using the current ratio and ownership structure (FF and SS) is positive and significant, while for investment held ownership found a significant negative relatinship.                             
The result reveals also that all ownership structures are negetavely correlated with high extent to the financial leverage measured using debt/equity.  
Findings indicate also an insignificant positive relationship between dividend yields and FF and SS, while for IH found insignificant negative. EPS found to have a significant positive impact on ROE and dividend yields. TA representing the firm size have a significant negative impact on the liquidity of firms and significant positive impact on its financial leverage level.                           
The findings in this research are useful for investors to understand how the financial policies and performance of firms are affected by the level and type of managerial ownership; high level of managerial ownership decreases the tendency of firms to go for debt financing, while increase the dividends yield as the EPS is enhanced in such firms.

DOI

10.21608/atasu.2019.38663

Keywords

Accounting disclosure, Ownership structure, Financial Performance, Financial Leverage, Dividend policy

Authors

First Name

Nevine Sobhy

Last Name

Abdel Megeid

MiddleName

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Affiliation

College of Management and Technology Arab Academy for Science, Technology and Maritime Transport

Email

nevinesobhy2@hotmail.com

City

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Orcid

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First Name

Mohamed Hassan

Last Name

Abd-Elmageed

MiddleName

-

Affiliation

Faculty of Commerce - Ain Shams University

Email

dr.mohamedabdelmageed@commerce.asu.edu.eg

City

-

Orcid

-

Volume

23

Article Issue

2

Related Issue

6109

Issue Date

2019-07-01

Receive Date

2019-07-02

Publish Date

2019-07-01

Page Start

1,102

Page End

1,138

Print ISSN

2356-8402

Online ISSN

2682-3128

Link

https://atasu.journals.ekb.eg/article_38663.html

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https://atasu.journals.ekb.eg/service?article_code=38663

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22

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المقالة الأصلية

Type Code

907

Publication Type

Journal

Publication Title

الفکر المحاسبى

Publication Link

https://atasu.journals.ekb.eg/

MainTitle

Does Accounting Disclosure of Ordinary Free Float, Investment Held and Strategic Ownership Matters for Corporate Financial Policies and Performance?

Details

Type

Article

Created At

22 Jan 2023