Ownership concentration, corporate risk-taking and performance: Evidence from Vietnamese listed firms

Figures & data

Table 1. Vietnamese equity market: number of listed firms

End of year	2000	‘01	‘02	‘03	‘04	‘05	‘06	‘07	‘08	‘09	‘10	‘11	‘12	‘13	‘14	‘15
HSX	5	11	20	22	26	32	106	138	170	196	275	301	307	301	310	307
HNX						9	87	112	168	257	367	393	396	377	365	377
Market scale	5	11	20	22	26	41	193	250	338	453	642	694	703	678	675	684
(Non-financial) “accounting” sample from Thomson Reuters									153	211	367	469	525	525	525	525
% Market scale									45	47	57	68	75	77	78	77
(Non-financial) final sample matching Thomson Reuters with Vietstock									141	197	346	444	502	502	502	502
% Market scale									42	43	54	64	71	74	74	73
Block ownership (%) in each firm—on average									48.2	47.5	46.9	48.3	49.0	50.1	50.6	51.1

Table 2. Descriptive statistics

	Obs. (Firm-years)	Mean	Std. Dev.	Min	Percentile 25%	Median	Percentile 75%	Max
Measures of firm performance
ROA	3136	0.09	0.09	−0.16	0.03	0.08	0.13	0.50
Q	2980	0.93	0.31	0.32	0.77	0.89	1.01	2.66
Measures of firm risk-taking
|eROA|	3136	0.06	0.05	0.00	0.02	0.04	0.08	0.40
|eQ|	2500	0.16	0.19	0.00	0.05	0.11	0.20	2.03
Corporate governance variables
Blockholding	3136	0.49	0.19	0.05	0.36	0.51	0.61	0.99
CEO duality	3136	0.35	0.48	0.00	0.00	0.00	1.00	1.00
Board size (no. of directors)	3136	5.45	1.07	3.00	5.00	5.00	6.00	11.00
Board size (ln)	3136	1.68	0.18	1.10	1.61	1.61	1.79	2.40
Board independence	3136	0.59	0.20	0.00	0.40	0.60	0.80	1.00
Gender diversity	3136	0.14	0.16	0.00	0.00	0.14	0.20	0.80
Firm characteristics
Leverage	3136	0.33	0.25	0.00	0.08	0.33	0.55	0.86
Firm size (total assets in billion dongs)	3136	1694.77	5502.12	12.15	198.29	451.45	1290.34	145,553.99
Firm size (ln)	3136	13.12	1.46	9.40	12.20	13.02	14.07	18.80
Capex	3136	0.09	0.23	0.00	0.01	0.02	0.07	2.09
Age ([no. of years from the IPO year] + 1)	3136	5.28	2.70	1.00	3.00	5.00	7.00	16.00
Age (ln)	3136	1.74	0.47	0.69	1.39	1.79	2.08	2.83
Tangibility	3136	0.26	0.21	0.00	0.09	0.20	0.36	0.92
Sales growth	3136	0.13	0.35	−0.88	−0.06	0.10	0.27	0.98

Table 3. Correlation matrix

	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)	(11)	(12)	(13)	(14)	(15)
(1) ROA	1.00
(2) Q	0.37***	1.00
(3) |eROA|	0.40***	0.18***	1.00
(4) |eQ|	0.31***	0.55***	0.31***	1.00
(5) Blockholding	0.10***	0.19***	0.08***	0.11***	1.00
(6) CEO duality	−0.02	−0.02	−0.03*	−0.01	−0.17***	1.00
(7) Board size	0.10***	0.08***	0.02	0.08***	−0.03	0.03	1.00
(8) Board independence	0.01	0.09***	0.06***	0.10***	0.11***	−0.34***	0.10***	1.00
(9) Gender diversity	0.07***	0.01	0.04**	0.07***	−0.03	0.08***	0.07***	−0.02	1.00
(10) Leverage	−0.19***	−0.04**	−0.29***	−0.31***	−0.01	0.01	0.07***	−0.10***	−0.10***	1.00
(11) Firm size	0.02	0.16***	−0.09***	−0.03*	0.13***	−0.07***	0.27***	0.09***	−0.02	0.43***	1.00
(12) Capex	−0.03*	0.02	0.02	0.02	0.03	−0.07***	0.12***	0.10***	−0.01	0.10***	0.19***	1.00
(13) Age	−0.14***	0.01	−0.09***	−0.01	0.04**	−0.14***	0.01	0.08***	0.00	−0.02	0.10***	−0.06***	1.00
(14) Tangibility	0.03	0.02	−0.02	0.00	0.14***	−0.09***	0.10**	0.03	−0.11***	0.20***	0.11***	0.30***	0.00	1.00
(15) Sales growth	0.28***	0.08***	0.17***	0.04*	−0.04**	−0.03	0.04**	0.02	0.06***	0.03	0.08***	0.01	−0.11***	0.00	1.00

* indicates significance at 10%; ** significance at 5%; *** significance at 1%.

Table 4. Ownership concentration and firm profitability: linearity

Dependent variable: Firm performance = ROA	Static panel						Dynamic panel
	(1)		(2)		(3)		(4)		(5)		(6)
Explanatory variables:	Pooled OLS without industry effects		Pooled OLS with industry effects		Fixed effects		Pooled OLS with industry effects		System GMM without industry effects		System GMM with industry effects
ROAt-1							0.6754	(27.25)***	0.4537	(10.19)***	0.4556	(10.36)***
Blockholding	0.0545	(4.33)***	0.0452	(3.50)***	0.0088	(0.56)	0.0149	(2.37)**	0.0737	(2.14)**	0.0498	(1.45)
CEO duality	−0.0038	(−0.66)	−0.0063	(−1.19)	−0.0040	(−0.92)	−0.0015	(−0.63)	−0.0002	(−0.01)	0.0034	(0.31)
Board size	0.0413	(2.38)**	0.0351	(2.21)**	0.0301	(2.74)***	0.0158	(2.24)**	−0.0129	(−0.25)	−0.0114	(−0.22)
Board independence	−0.0166	(−1.24)	−0.0158	(−1.20)	−0.0148	(−1.25)	−0.0062	(−1.00)	0.0040	(0.11)	0.0003	(0.01)
Gender diversity	0.0229	(1.20)	−0.0041	(−0.22)	0.0161	(0.83)	0.0051	(0.64)	−0.0261	(−0.59)	−0.0187	(−0.39)
Leverage	−0.0927	(−6.75)***	−0.0991	(−7.21)***	−0.1040	(−6.06)***	−0.0321	(−5.60)***	−0.0439	(−1.12)	−0.0542	(−1.47)
Firm size	0.0061	(2.36)**	0.0085	(3.43)***	0.0322	(4.36)***	0.0014	(1.19)	0.0169	(1.76)*	0.0156	(1.53)
Capex	−0.0285	(−3.71)***	−0.0111	(−1.46)	−0.0064	(−0.67)	−0.0160	(−2.13)**	−0.1156	(−1.64)	−0.1133	(−1.46)
Age	−0.0010	(−0.12)	−0.0120	(−1.47)	−0.0182	(−1.27)	0.0026	(0.67)	−0.0017	(−0.23)	−0.0059	(−0.78)
Tangibility	0.0241	(1.95)*	−0.0024	(−0.17)	−0.0688	(−3.84)***	0.0071	(1.26)	−0.0052	(−0.11)	0.0099	(0.21)
Sales growth	0.0638	(12.93)***	0.0638	(13.39)***	0.0516	(12.93)***	0.0667	(13.94)***	0.0365	(0.76)	0.0382	(0.71)
Constant	−0.0254	(−0.69)	−0.0278	(−0.71)	−0.2744	(−3.07)***	−0.0032	(−0.20)	−0.1319	(−1.50)	−0.1176	(−1.22)
Industry fixed effects	No		Yes		No		Yes		No		Yes
Year fixed effects	Yes		Yes		Yes		Yes		Yes		Yes
Prob. (F statistic)	0.000		0.000		0.000		0.000		0.000		0.000
R-squared	0.199		0.268		0.272		0.651
No. of firms	502		502		502		502		502		502
No. of observations	3136		3136		3136		2634		2634		2634
No. of instruments									40		48
Arellano-Bond test: AR(1) (p-value)									0.000		0.000
Arellano-Bond test: AR(2) (p-value)									0.171		0.182
Hansen J-test of over-identification (p-value)									0.320		0.271
Difference-in-Hansen test for exogeneity (p-value)
GMM instruments for level equation (All)									0.243		0.198
GMM instruments for diff. equation (Lagged performance)									0.201		0.221
GMM instruments for level equation (Lagged performance)									0.185		0.164

Estimated coefficients are reported with heteroskedasticity-robust t-statistics in parentheses. * indicates significance at 10%; ** significance at 5%; *** significance at 1%.

System-GMM estimates are Blundell and Bond (1998) system GMM estimates using a two-equation system of the regression in levels and in first differences.

Table 5. Ownership concentration and firm profitability: non-linearity

Dependent variable: Firm Performance = ROA	Static panel						Dynamic panel
	(1)		(2)		(3)		(4)		(5)		(6)
Explanatory variables:	Pooled OLS without industry effects		Pooled OLS with industry effects		Fixed effects		Pooled OLS with industry effects		System GMM without industry effects		System GMM with industry effects
ROAt-1							0.6756	(27.43)***	0.4552	(10.18)***	0.4586	(10.36)***
Blockholding	0.0921	(1.83)*	0.0859	(1.77)*	−0.0263	(−0.52)	0.0633	(2.43)**	0.0676	(0.60)	0.0768	(0.70)
Blockholding^2	−0.0401	(−0.74)	−0.0435	(−0.82)	0.0373	(0.73)	−0.0515	(−1.96)*	0.0017	(0.01)	−0.0336	(−0.30)
CEO duality	−0.0038	(−0.66)	−0.0063	(−1.19)	−0.0039	(−0.90)	−0.0015	(−0.62)	0.0005	(0.05)	0.0047	(0.42)
Board size	0.0410	(2.38)**	0.0348	(2.19)**	0.0306	(2.79)***	0.0155	(2.21)**	−0.0123	(−0.24)	−0.0136	(−0.26)
Board independence	−0.0161	(−1.20)	−0.0153	(−1.17)	−0.0153	(−1.29)	−0.0056	(−0.91)	0.0039	(0.11)	0.0018	(0.05)
Gender diversity	0.0234	(1.23)	−0.0035	(−0.19)	0.0160	(0.82)	0.0059	(0.74)	−0.0218	(−0.49)	−0.0145	(−0.31)
Leverage	−0.0931	(−6.72)***	−0.0997	(−7.21)***	−0.1038	(−6.07)***	−0.0327	(−5.71)***	−0.0357	(−0.97)	−0.0490	(−1.42)
Firm size	0.0061	(2.39)**	0.0086	(3.46)***	0.0321	(4.37)***	0.0015	(1.29)	0.0166	(1.78)*	0.0158	(1.59)
Capex	−0.0281	(−3.66)***	−0.0107	(−1.40)	−0.0069	(−0.73)	−0.0154	(−2.12)**	−0.1034	(−1.57)	−0.1023	(−1.44)
Age	−0.0013	(−0.16)	−0.0124	(−1.51)	−0.0180	(−1.26)	0.0021	(0.54)	−0.0012	(−0.15)	−0.0062	(−0.83)
Tangibility	0.0247	(2.00)**	−0.0019	(−0.14)	−0.0689	(−3.85)***	0.0077	(1.37)	−0.0154	(−0.33)	0.0018	(0.04)
Sales growth	0.0639	(12.92)***	0.0638	(13.38)***	0.0515	(12.94)***	0.0667	(13.92)***	0.0268	(0.59)	0.0297	(0.60)
Constant	−0.0337	(−0.85)	−0.0372	(−0.90)	−0.2667	(−3.01)***	−0.0142	(−0.81)	−0.1293	(−1.49)	−0.1218	(−1.27)
Industry fixed effects	No		Yes		No		Yes		No		Yes
Year fixed effects	Yes		Yes		Yes		Yes		Yes		Yes
Prob. (F statistic)	0.000		0.000		0.000		0.000		0.000		0.000
R-squared	0.199		0.268		0.272		0.651
No. of firms	502		502		502		502		502		502
No. of observations	3136		3136		3136		3136		2634		2634
No. of instruments									42		50
Arellano-Bond test: AR(1) (p-value)									0.000		0.000
Arellano-Bond test: AR(2) (p-value)									0.176		0.172
Hansen J-test of over-identification (p-value)									0.334		0.295
Difference-in-Hansen test for exogeneity (p-value)
GMM instruments for level equation (All)									0.252		0.220
GMM instruments for diff. equation (Lagged performance)									0.206		0.217
GMM instruments for level equation (Lagged performance)									0.224		0.187

Estimated coefficients are reported with heteroskedasticity-robust t-statistics in parentheses. * indicates significance at 10%; ** significance at 5%; *** significance at 1%.

System-GMM estimates are Blundell and Bond (1998) system GMM estimates using a two-equation system of the regression in levels and in first differences.

Table 6. Ownership concentration and firm valuation: linearity

Dependent variable: Firm Performance = Q	Static panel						Dynamic panel
	(1)		(2)		(3)		(4)		(5)		(6)
Explanatory variables:	Pooled OLS without industry effects		Pooled OLS with industry effects		Fixed effects		Pooled OLS with industry effects		System GMM without industry effects		System GMM with industry effects
Qt-1							0.6707	(28.60)***	0.7834	(14.75)***	0.7707	(14.93)***
Blockholding	0.1923	(4.28)***	0.1745	(4.01)***	0.0710	(0.73)	0.0587	(2.37)**	0.3158	(2.29)**	0.2644	(1.96)*
CEO duality	0.0328	(2.01)**	0.0316	(1.96)**	0.0337	(1.27)	0.0135	(1.62)	0.0305	(0.83)	0.0350	(0.97)
Board size	0.0385	(0.70)	0.0414	(0.74)	0.0439	(0.66)	0.0470	(1.89)*	−0.3006	(−1.58)	−0.2876	(−1.56)
Board independence	0.0905	(2.56)**	0.0844	(2.35)**	0.0056	(0.12)	0.0193	(1.02)	0.1491	(1.32)	0.1343	(1.24)
Gender diversity	−0.0341	(−0.73)	−0.0606	(−1.27)	−0.0793	(−1.22)	−0.0137	(−0.56)	−0.0760	(−0.53)	−0.0104	(−0.07)
ROAt	0.9825	(7.52)***	0.9508	(7.33)***	0.6340	(4.89)***	0.6910	(6.74)***	1.4063	(2.20)**	1.4642	(2.39)**
ROAt-1	0.6069	(4.60)***	0.5833	(4.45)***	0.3362	(2.83)***	0.1270	(1.37)	−0.3644	(−0.99)	−0.3842	(−1.10)
Leverage	0.0107	(0.32)	0.0062	(0.17)	0.0758	(1.02)	0.0196	(1.14)	−0.0183	(−0.21)	−0.0425	(−0.48)
Firm size	0.0239	(3.05)***	0.0263	(3.07)***	0.0948	(1.75)*	0.0032	(0.85)	0.0340	(1.37)	0.0373	(1.36)
Capex	0.0299	(1.06)	0.0374	(1.36)	−0.0210	(−0.51)	0.0284	(1.69)*	0.1202	(1.06)	0.1154	(0.99)
Age	−0.0306	(−1.13)	−0.0489	(−1.72)*	−0.2135	(−2.20)**	0.0265	(2.16)**	0.0368	(1.80)*	0.0305	(1.30)
Tangibility	−0.0656	(−1.83)*	−0.0769	(−2.01)**	0.1989	(1.78)*	−0.0353	(−1.92)*	−0.1582	(−1.36)	−0.1585	(−1.59)
Sales growth	−0.0042	(−0.30)	−0.0031	(−0.22)	−0.0016	(−0.14)	0.0210	(1.84)*	−0.0128	(−0.12)	−0.0162	(−0.15)
Constant	0.3655	(2.85)***	0.3572	(2.67)***	−0.2278	(−0.32)	0.1519	(2.31)**	0.0453	(0.16)	−0.0173	(−0.06)
Industry fixed effects	No		Yes		No		Yes		No		Yes
Year fixed effects	Yes		Yes		Yes		Yes		Yes		Yes
Prob. (F statistic)	0.000		0.000		0.000		0.000		0.000		0.000
R-squared	0.319		0.330		0.223		0.642
No. of firms	480		480		480		480		480		480
No. of observations	2500		2500		2500		2500		2500		2500
No. of instruments									40		48
Arellano-Bond test: AR(1) (p-value)									0.000		0.000
Arellano-Bond test: AR(2) (p-value)									0.079		0.080
Hansen J-test of over-identification (p-value)									0.682		0.586
Difference-in-Hansen test for exogeneity (p-value)
GMM instruments for level equation (All)									0.623		0.503
GMM instruments for diff. equation (Lagged performance)									0.412		0.520
GMM instruments for level equation (Lagged performance)									0.238		0.125

Estimated coefficients are reported with heteroskedasticity-robust t-statistics in parentheses. * indicates significance at 10%; ** significance at 5%; *** significance at 1%.

System-GMM estimates are Blundell and Bond (1998) system GMM estimates using a two-equation system of the regression in levels and in first differences.

Table 7. Ownership concentration and firm valuation: non-linearity

Dependent variable: Firm Performance = Q	Static panel						Dynamic panel
	(1)		(2)		(3)		(4)		(5)		(6)
Explanatory variables:	Pooled OLS without industry effects		Pooled OLS with industry effects		Fixed effects		Pooled OLS with industry effects		System GMM without industry effects		System GMM with industry effects
Qt-1							0.6681	(28.65)***	0.7180	(15.98)***	0.7064	(15.83)***
Blockholding	−0.2773	(−1.44)	−0.2883	(−1.47)	−0.4317	(−1.75)*	−0.1456	(−1.66)*	−0.3932	(−1.16)	−0.3783	(−1.11)
Blockholding^2	0.4984	(2.35)**	0.4921	(2.31)**	0.5426	(2.54)**	0.2177	(2.45)**	0.7297	(1.83)*	0.6922	(1.74)*
CEO duality	0.0325	(2.00)**	0.0313	(1.96)*	0.0347	(1.32)	0.0134	(1.62)	0.0138	(0.36)	0.0195	(0.52)
Board size	0.0423	(0.79)	0.0439	(0.81)	0.0476	(0.73)	0.0480	(1.96)*	−0.1592	(−0.92)	−0.1585	(−0.91)
Board independence	0.0829	(2.41)**	0.0779	(2.23)**	−0.0023	(−0.05)	0.0167	(0.89)	0.0676	(0.57)	0.0640	(0.55)
Gender diversity	−0.0400	(−0.84)	−0.0685	(−1.40)	−0.0851	(−1.31)	−0.0173	(−0.70)	−0.0343	(−0.24)	0.0027	(0.02)
ROAt	1.0027	(7.62)***	0.9707	(7.42)***	0.6360	(4.89)***	0.7008	(6.84)***	1.7978	(3.10)***	1.7435	(2.97)***
ROAt-1	0.5921	(4.43)***	0.5694	(4.28)***	0.3076	(2.58)***	0.1227	(1.31)	−0.6651	(−2.00)**	−0.6359	(−1.94)*
Leverage	0.0186	(0.55)	0.0147	(0.41)	0.0804	(1.08)	0.0233	(1.33)	0.0385	(0.45)	0.0058	(0.07)
Firm size	0.0228	(2.91)***	0.0250	(2.92)***	0.0929	(1.72)*	0.0027	(0.72)	0.0228	(0.89)	0.0253	(0.91)
Capex	0.0243	(0.85)	0.0319	(1.14)	−0.0285	(−0.69)	0.0260	(1.55)	0.1472	(1.34)	0.1322	(1.15)
Age	−0.0260	(−0.99)	−0.0439	(−1.61)	−0.2035	(−2.14)**	0.0284	(2.33)**	0.0361	(1.75)*	0.0295	(1.29)
Tangibility	−0.0727	(−1.99)**	−0.0815	(−2.10)**	0.1981	(1.77)*	−0.0375	(−2.01)**	−0.2093	(−1.78)*	−0.1924	(−1.91)*
Sales growth	−0.0055	(−0.40)	−0.0041	(−0.30)	−0.0019	(−0.16)	0.0204	(1.80)*	0.0103	(0.10)	0.0230	(0.22)
Constant	0.4668	(3.43)***	0.4641	(3.22)***	−0.1151	(−0.16)	0.2000	(2.73)***	0.1810	(0.64)	0.1488	(0.52)
Industry fixed effects	No		Yes		No		Yes		No		Yes
Year fixed effects	Yes		Yes		Yes		Yes		Yes		Yes
Prob. (F statistic)	0.000		0.000		0.000		0.000		0.000		0.000
R-squared	0.324		0.335		0.228		0.643
No. of firms	480		480		480		480		480		480
No. of observations	2500		2500		2500		2500		2500		2500
No. of instruments									43		51
Arellano-Bond test: AR(1) (p-value)									0.000		0.000
Arellano-Bond test: AR(2) (p-value)									0.144		0.129
Hansen J-test of over-identification (p-value)									0.658		0.605
Difference-in-Hansen test for exogeneity (p-value)
GMM instruments for level equation (All)									0.563		0.507
GMM instruments for diff. equation (Lagged performance)									0.124		0.166
GMM instruments for level equation (Lagged performance)									0.271		0.195

Estimated coefficients are reported with heteroskedasticity-robust t-statistics in parentheses. * indicates significance at 10%; ** significance at 5%; *** significance at 1%.

System-GMM estimates are Blundell and Bond (1998) system GMM estimates using a two-equation system of the regression in levels and in first differences.

Table 8. Ownership concentration and firm risk-taking

Firm Risk-taking =  (Dependent variable)	Absolute deviation from expected ROA (|eROA|)						Absolute deviation from expected Q (|eQ|)
	(1)		(2)		(3)		(4)		(5)		(6)
Explanatory variables:	Pooled OLS with industry effects		System GMM with industry effects		System GMM with industry effects, non-linear		Pooled OLS with industry effects		System GMM with industry effects		System GMM with industry effects, non-linear
Lagged dependent variable			0.2509	(6.14)***	0.2633	(5.55)***			0.4503	(5.34)***	0.4401	(5.08)***
Blockholding	0.0229	(3.27)***	0.0762	(2.29)**	0.0687	(0.82)	0.0667	(2.74)***	0.0921	(0.61)	0.1933	(0.49)
Blockholding^2					−0.0359	(−0.42)					−0.1347	(−0.35)
CEO duality	−0.0022	(−0.77)	−0.0047	(−0.54)	−0.0009	(−0.12)	0.0161	(1.41)	0.0008	(0.02)	0.0046	(0.13)
Board size	0.0039	(0.41)	−0.0524	(−1.42)	0.0107	(0.34)	0.0397	(1.25)	−0.2585	(−1.6)	−0.2849	(−1.71)*
Board independence	0.0062	(0.81)	−0.0225	(−0.83)	−0.0082	(−0.33)	0.0647	(2.38)**	−0.0711	(−0.72)	−0.0980	(−1.02)
Gender diversity	−0.0058	(−0.56)	0.0043	(0.13)	0.0115	(0.37)	−0.0009	(−0.03)	−0.0498	(−0.42)	−0.0181	(−0.15)
ROAt							0.2497	(2.59)***	0.7775	(1.28)	0.7344	(1.18)
ROAt-1							0.2493	(3.09)***	−0.3877	(−1.33)	−0.3679	(−1.24)
Leverage	−0.0683	(−9.17)***	−0.0369	(−1.43)	−0.0389	(−1.50)	−0.2195	(−9.47)***	−0.0108	(−0.10)	−0.0262	(−0.24)
Firm size	0.0014	(1.09)	0.0005	(0.07)	−0.0073	(−1.11)	0.0090	(1.74)*	0.0438	(1.62)	0.0441	(1.64)
Capex	0.0111	(2.40)**	0.0216	(0.87)	0.0536	(1.20)	0.0245	(1.97)**	−0.0124	(−0.07)	0.0180	(0.10)
Age	−0.0122	(−2.73)***	−0.0073	(−1.37)	−0.0057	(−0.93)	−0.0328	(−1.77)*	−0.0119	(−0.54)	−0.0075	(−0.33)
Tangibility	−0.0022	(−0.30)	−0.0442	(−1.77)*	−0.0681	(−2.31)**	0.0320	(1.48)	−0.0657	(−0.71)	−0.0677	(−0.73)
Sales growth	0.0259	(8.74)***	0.0137	(0.44)	0.0016	(0.06)	0.0041	(0.38)	0.0540	(0.62)	0.0526	(0.58)
Constant	0.0546	(2.67)***	0.1430	(1.72)*	0.1525	(2.11)**	−0.0136	(−0.17)	−0.0913	(−0.33)	−0.0494	(−0.18)
Industry fixed effects	Yes		Yes		Yes		Yes		Yes		Yes
Year fixed effects	Yes		Yes		Yes		Yes		Yes		Yes
Prob. (F statistic)	0.000		0.000		0.000		0.000		0.000		0.000
R-squared	0.157						0.214
No. of firms	502		502		502		480		480		480
No. of observations	3136		2634		2634		2500		2020		2020
No. of instruments			44		53				42		44
Arellano-Bond test: AR(1) (p-value)			0.000		0.000				0.000		0.000
Arellano-Bond test: AR(2) (p-value)			0.731		0.994				0.253		0.279
Hansen J-test of over-identification (p-value)			0.142		0.161				0.462		0.465
Difference-in-Hansen test for exogeneity (p-value)
GMM instruments for level equation (All)			0.112		0.357				0.397		0.582
GMM instruments for diff. equation (Lagged performance)			0.474		0.185				0.663		0.582
GMM instruments for level equation (Lagged performance)			0.760		0.629				0.312		0.247

Estimated coefficients are reported with heteroskedasticity-robust t-statistics in parentheses. * indicates significance at 10%; ** significance at 5%; *** significance at 1%.

System-GMM estimates are Blundell and Bond (1998) system GMM estimates using a two-equation system of the regression in levels and in first differences.

Table 9. Test for sensitivity to reductions in the instrument count: the specification of profitability

	(1)		(2)		(3)		(4)
	Full instruments, collapsed		2nd-3rd lag instruments, collapsed		2nd lag instruments only, collapsed		Selected instruments, collapsed
A. Linear relation
ROAt-1	0.4595	(11.76)***	0.4687	(10.26)***	0.4769	(8.39)***	0.4556	(10.36)***
Blockholding	0.0349	(1.19)	0.0499	(1.39)	0.0441	(1.12)	0.0498	(1.45)
No. of firms	502		502		502		502
No. of observations	2634		2634		2634		2634
No. of instruments	93		49		38		48
Arellano-Bond test for AR(2) in differences (p-value)	0.152		0.175		0.313		0.182
Hansen J-test of over-identification (p-value)	0.850		0.268		0.315		0.271
Difference-in-Hansen test for exogeneity (p-value)
GMM instruments for level equation (All)	0.933		0.759				0.198
GMM instruments for diff. equation (Lagged performance)	0.853		0.715		0.714		0.221
GMM instruments for level equation (Lagged performance)	0.472		1.000		0.894		0.164
GMM instruments for diff. equation (Governance variables)	0.948		0.865		0.294		0.680
GMM instruments for level equation (Governance variables)	0.998		0.964		0.483		0.650
GMM instruments for diff. equation (Firm characteristics)	0.979		0.375		0.620		0.788
GMM instruments for level equation (Firm characteristics)	0.763		0.518		0.335		0.249
IV instruments for level equation (Age; Industries; Years)	0.892		0.586				0.200
B. Non-linear relation
ROAt-1	0.4686	(12.57)***	0.4719	(10.58)***	0.4793	(8.63)***	0.4586	(10.36)***
Blockholding	0.1087	(1.29)	0.0824	(0.85)	0.0950	(0.91)	0.0768	(0.70)
Blockholding^2	−0.0978	(−1.11)	−0.0440	(−0.41)	−0.0670	(−0.58)	−0.0336	(−0.30)
No. of firms	502		502		502		502
No. of observations	2634		2634		2634		2634
No. of instruments	100		52		40		50
Arellano-Bond test for AR(2) in differences (p-value)	0.136		0.179		0.295		0.172
Hansen J-test of over-identification (p-value)	0.842		0.331		0.330		0.295
Difference-in-Hansen test for exogeneity (p-value)
GMM instruments for level equation (All)	0.858		0.611				0.220
GMM instruments for diff. equation (Lagged performance)	0.685		0.724		0.755		0.217
GMM instruments for level equation (Lagged performance)	0.381		0.999		0.829		0.187
GMM instruments for diff. equation (Governance variables)	0.922		0.862		0.283		0.692
GMM instruments for level equation (Governance variables)	0.980		0.945		0.509		0.684
GMM instruments for diff. equation (Firm characteristics)	0.987		0.341		0.679		0.757
GMM instruments for level equation (Firm characteristics)	0.835		0.469		0.388		0.231
IV instruments for level equation (Age; Industries; Years)	0.857		0.466				0.291

Estimated coefficients are reported with heteroskedasticity-robust t-statistics in parentheses. * indicates significance at 10%; ** significance at 5%; *** significance at 1%.

Table 10. Test for sensitivity to reductions in the instrument count: the specification of valuation

	(1)		(2)		(3)		(4)
	Full instruments, collapsed		2nd-3rd lag instruments, collapsed		2nd lag instruments only, collapsed		Selected instruments, collapsed
A. Linear relation
Qt-1	0.6926	(12.76)***	0.7225	(15.01)***	0.8153	(13.01)***	0.7707	(14.93)***
Blockholding	0.2598	(1.93)*	0.2445	(1.78)*	0.2806	(1.94)*	0.2644	(1.96)*
No. of firms	480		480		480		480
No. of observations	2500		2500		2500		2500
No. of instruments	101		54		42		48
Arellano-Bond test for AR(2) in differences (p-value)	0.045		0.080		0.142		0.080
Hansen J-test of over-identification (p-value)	0.033		0.800		0.302		0.586
Difference-in-Hansen test for exogeneity (p-value)
GMM instruments for level equation (All)	0.036		0.390				0.503
GMM instruments for diff. equation (Lagged performance)	0.398		0.461		0.615		0.520
GMM instruments for level equation (Lagged performance)	0.228		0.491		0.159		0.125
GMM instruments for diff. equation (Governance variables)	0.014		0.593		0.161		0.163
GMM instruments for level equation (Governance variables)	0.245		0.308		0.188		0.254
GMM instruments for diff. equation (Firm characteristics)	0.021		0.580		0.063		0.286
GMM instruments for level equation (Firm characteristics)	0.675		0.725		0.659		0.708
IV instruments for level equation (Age; Industries; Years)	0.013		0.428				0.448
B. Non-linear relation
Qt-1	0.6680	(11.88)***	0.6902	(14.73)***	0.7774	(12.98)***	0.7064	(15.83)***
Blockholding	−0.4702	(−1.53)	−0.4210	(−1.32)	−0.2614	(−0.65)	−0.3783	(−1.11)
Blockholding^2	0.7724	(2.28)**	0.7399	(1.94)*	0.5875	(1.26)	0.6922	(1.74)*
No. of firms	480		480		480		480
No. of observations	2500		2500		2500		2500
No. of instruments	108		57		44		51
Arellano-Bond test for AR(2) in differences (p-value)	0.062		0.146		0.184		0.129
Hansen J-test of over-identification (p-value)	0.018		0.821		0.330		0.605
Difference-in-Hansen test for exogeneity (p-value)
GMM instruments for level equation (All)	0.006		0.451				0.507
GMM instruments for diff. equation (Lagged performance)	0.087		0.214		0.446		0.166
GMM instruments for level equation (Lagged performance)	0.005		0.963		0.280		0.195
GMM instruments for diff. equation (Governance variables)	0.007		0.571		0.155		0.151
GMM instruments for level equation (Governance variables)	0.227		0.182		0.110		0.171
GMM instruments for diff. equation (Firm characteristics)	0.015		0.527		0.056		0.464
GMM instruments for level equation (Firm characteristics)	0.596		0.855		0.645		0.828
IV instruments for level equation (Age; Industries; Years)	0.002		0.416				0.527

Estimated coefficients are reported with heteroskedasticity-robust t-statistics in parentheses. * indicates significance at 10%; ** significance at 5%; *** significance at 1%.

Table 11. Ownership concentration and industry-adjusted performance

Firm performance =  (Dependent variable)	Industry-adjusted ROA						Industry-adjusted Q
	(1)		(2)		(3)		(4)		(5)		(6)
Explanatory variables:	Pooled OLS with industry effects		Dynamic system GMM		Dynamic system GMM, non-linear		Pooled OLS with industry effects		Dynamic system GMM		Dynamic system GMM, non-linear
Lagged dependent variable			0.4555	(10.23)***	0.4542	(10.35)***			0.7746	(14.73)***	0.7088	(15.56)***
Blockholding	0.0452	(3.50)***	0.0530	(1.46)	0.0903	(0.82)	0.1749	(4.01)***	0.2615	(1.94)*	−0.3883	(−1.14)
Blockholding^2					−0.0453	(−0.40)					0.6943	(1.73)*
CEO duality	−0.0061	(−1.16)	0.0010	(0.09)	0.0023	(0.21)	0.0316	(1.96)*	0.0355	(0.98)	0.0192	(0.51)
Board size	0.0350	(2.21)**	−0.0067	(−0.13)	−0.0117	(−0.23)	0.0417	(0.74)	−0.2832	(−1.54)	−0.1544	(−0.88)
Board independence	−0.0158	(−1.20)	−0.0026	(−0.08)	−0.0016	(−0.05)	0.0846	(2.35)**	0.1329	(1.23)	0.0635	(0.54)
Gender diversity	−0.0040	(−0.21)	−0.0369	(−0.83)	−0.0303	(−0.69)	−0.0603	(−1.25)	−0.0133	(−0.09)	0.0048	(0.03)
ROAt							0.9530	(7.33)***	1.4338	(2.29)**	1.7530	(2.91)***
ROAt-1							0.5839	(4.45)***	−0.3742	(−1.06)	−0.6395	(−1.92)*
Leverage	−0.0989	(−7.21)***	−0.0733	(−1.97)**	−0.0664	(−1.85)*	0.0051	(0.14)	−0.0441	(−0.49)	0.0067	(0.08)
Firm size	0.0085	(3.43)***	0.0141	(1.28)	0.0150	(1.42)	0.0265	(3.07)***	0.0369	(1.35)	0.0246	(0.88)
Capex	−0.0104	(−1.40)	−0.1241	(−1.84)*	−0.1138	(−1.82)*	0.0372	(1.35)	0.1109	(0.94)	0.1332	(1.15)
Age	−0.0119	(−1.46)	−0.0046	(−0.60)	−0.0052	(−0.69)	−0.0492	(−1.72)*	0.0313	(1.34)	0.0300	(1.30)
Tangibility	−0.0028	(−0.21)	0.0209	(0.46)	0.0115	(0.27)	−0.0766	(−2.00)**	−0.1590	(−1.59)	−0.1941	(−1.92)*
Sales growth	0.0638	(13.32)***	0.0632	(1.28)	0.0539	(1.14)	−0.0031	(−0.22)	−0.0131	(−0.12)	0.0214	(0.21)
Constant	−0.1098	(−2.82)***	−0.1491	(−1.41)	−0.1587	(−1.54)	−0.5399	(−4.00)***	−0.2204	(−0.78)	−0.1080	(−0.38)
Industry fixed effects	Yes		Yes		Yes		Yes		Yes		Yes
Year fixed effects	Yes		Yes		Yes		Yes		Yes		Yes
Prob. (F statistic)	0.000		0.000		0.000		0.000		0.000		0.000
R-squared	0.208						0.314
No. of firms	502		502		502		480		480		480
No. of observations	3136		2634		2634		2500		2500		2500
No. of instruments			48		50				48		51
Arellano-Bond test: AR(1) (p-value)			0.000		0.000				0.000		0.000
Arellano-Bond test: AR(2) (p-value)			0.174		0.156				0.079		0.134
Hansen J-test of over-identification (p-value)			0.254		0.264				0.591		0.602
Difference-in-Hansen test for exogeneity (p-value)
GMM instruments for level equation (All)			0.175		0.187				0.499		0.497
GMM instruments for diff. equation (Lagged performance)			0.248		0.226				0.559		0.150
GMM instruments for level equation (Lagged performance)			0.142		0.173				0.125		0.206

Estimated coefficients are reported with heteroskedasticity-robust t-statistics in parentheses. * indicates significance at 10%; ** significance at 5%; *** significance at 1%.

System-GMM estimates are Blundell and Bond (1998) system GMM estimates using a two-equation system of the regression in levels and in first differences.

Table 12. Ownership concentration and risk-taking: z-values

Dependent variable: z-value	(1)		(2)		(3)
Explanatory variables:	Pooled OLS with industry effects		Dynamic system GMM		Dynamic system GMM, non-linear
Lagged dependent variable			0.3917	(8.36)***	0.3928	(8.37)***
Blockholding	1.1698	(2.61)***	1.6092	(1.72)*	2.9180	(0.95)
Blockholding^2					−1.4903	(−0.45)
CEO duality	−0.0828	(−0.51)	−0.0344	(−0.14)	−0.0239	(−0.10)
Board size	1.4873	(2.79)***	−0.3908	(−0.33)	−0.3672	(−0.32)
Board independence	−0.3699	(−0.79)	−0.8649	(−1.09)	−0.8344	(−1.07)
Gender diversity	−0.3600	(−0.54)	−0.7399	(−0.56)	−0.8164	(−0.67)
Leverage	−1.5825	(−3.66)***	−1.4581	(−1.91)*	−1.5266	(−2.02)**
Firm size	0.0189	(0.25)	0.3189	(1.51)	0.3075	(1.49)
Capex	−0.1925	(−0.92)	−1.1871	(−0.63)	−1.3730	(−0.82)
Age	−0.0150	(−0.05)	−0.0607	(−0.27)	−0.0634	(−0.28)
Tangibility	0.4652	(0.85)	1.0832	(1.13)	1.1474	(1.30)
Sales growth	1.2583	(12.04)***	1.6075	(1.65)*	1.8002	(2.07)**
Constant	−3.1586	(−2.55)**	−3.6222	(−1.67)*	−3.7582	(−1.73)*
Industry fixed effects	Yes		Yes		Yes
Year fixed effects	Yes		Yes		Yes
Prob. (F statistic)	0.000		0.000		0.000
R-squared	0.102
No. of firms	502		502		502
No. of observations	3136		2634		2634
No. of instruments			48		50
Arellano-Bond test: AR(1) (p-value)			0.000		0.000
Arellano-Bond test: AR(2) (p-value)			0.611		0.575
Hansen J-test of over-identification (p-value)			0.279		0.309
Difference-in-Hansen test for exogeneity (p-value)
GMM instruments for level equation (All)			0.258		0.329
GMM instruments for diff. equation (Lagged performance)			0.568		0.468
GMM instruments for level equation (Lagged performance)			0.568		0.503

Estimated coefficients are reported with heteroskedasticity-robust t-statistics in parentheses.

* indicates significance at 10%; ** significance at 5%; *** significance at 1%.

System-GMM estimates are Blundell and Bond (1998) system GMM estimates using a two-equation system of the regression in levels and in first differences.

Simple OLS regression of firm profitability

Dependent variable:	ROA
	(1)		(2)		(3)				(5)		(6)
Explanatory variables:	w/o controls		w/ firm characteristics		w/ firm characteristics and board composition		w/ firm characteristics, board composition, and industry effects		w/ firm characteristics, board composition, and year effects		w/ firm characteristics, board composition, and industry & year effects
Blockholding	0.0503	(5.75)***	0.0454	(5.49)***	0.0492	(5.88)***	0.0391	(4.81)***	0.0545	(6.62)***	0.0452	(5.62)***
CEO duality					−0.0038	(−1.09)	−0.0064	(−1.92)*	−0.0038	(−1.11)	−0.0063	(−1.91)*
Board size					0.0445	(4.93)***	0.0368	(4.20)***	0.0413	(4.66)***	0.0351	(4.05)***
Board independence					−0.0192	(−2.29)**	−0.0180	(−2.23)**	−0.0166	(−2.03)**	−0.0158	(−1.99)**
Gender diversity					0.0225	(2.33)**	−0.0066	(−0.69)	0.0229	(2.42)**	−0.0041	(−0.44)
Leverage			−0.0946	(−13.82)***	−0.0928	(−13.40)***	−0.0989	(−14.64)***	−0.0927	(−13.64)***	−0.0991	(−14.88)***
Firm size			0.0071	(5.88)***	0.0057	(4.59)***	0.0084	(6.74)***	0.0061	(4.97)***	0.0085	(6.92)***
Capex			−0.0250	(−3.48)***	−0.0261	(−3.63)***	−0.0076	(−1.09)	−0.0285	(−4.04)***	−0.0111	(−1.61)
Age			−0.0266	(−7.99)***	−0.0263	(−7.87)***	−0.0327	(−10.16)***	−0.0010	(−0.23)	−0.0120	(−2.92)***
Tangibility			0.0312	(4.09)***	0.0295	(3.86)***	−0.0002	(−0.03)	0.0241	(3.20)***	−0.0024	(−0.31)
Sales growth			0.0704	(15.82)***	0.0694	(15.63)***	0.0684	(16.18)***	0.0638	(14.35)***	0.0638	(14.97)***
Constant	0.0669	(14.49)***	0.0400	(2.63)***	−0.0098	(−0.51)	−0.0092	(−0.46)	−0.0254	(−1.27)	−0.0278	(−1.34)
Industry fixed effects	No		No		No		Yes		No		Yes
Year fixed effects	No		No		No		No		Yes		Yes
Prob. (F statistic)	0.000		0.000		0.000		0.000		0.000		0.000
R-squared	0.010		0.155		0.165		0.246		0.199		0.268
Adj. R-squared	0.010		0.154		0.162		0.241		0.194		0.262
No. of firms	502		502		502		502		502		502
No. of observations	3136		3136		3136		3136		3136		3136

Estimated coefficients are reported with t-statistics in parentheses. * indicates significance at 10%; ** significance at 5%; *** significance at 1%.

Simple OLS regression of firm valuation

Dependent variable:	Q
	(1)		(2)		(3)		(4)		(5)		(6)
Explanatory variables:	w/o controls		w/firm characteristics		w/firm characteristics and board composition		w/firm characteristics, board composition, and industry effects		w/firm characteristics, board composition, and year effects		w/firm characteristics, board composition, and industry & year effects
Blockholding	0.3101	(10.65)***	0.2059	(7.02)***	0.2084	(7.02)***	0.1997	(6.62)***	0.1923	(6.84)***	0.1745	(6.12)***
CEO duality					0.0330	(2.66)***	0.0324	(2.61)***	0.0328	(2.81)***	0.0316	(2.70)***
Board size					0.0331	(1.05)	0.0346	(1.08)	0.0385	(1.29)	0.0414	(1.37)
Board independence					0.1198	(4.07)***	0.1163	(3.92)***	0.0905	(3.25)***	0.0844	(3.02)***
Gender diversity					−0.0267	(−0.78)	−0.0512	(−1.43)	−0.0341	(−1.05)	−0.0606	(−1.80)*
ROAt			1.0952	(10.98)***	1.0944	(10.99)***	1.0638	(10.64)***	0.9825	(10.37)***	0.9508	(10.03)***
ROAt-1			0.3364	(3.67)***	0.3446	(3.77)***	0.3206	(3.48)***	0.6069	(6.93)***	0.5833	(6.64)***
Leverage			−0.0157	(−0.63)	−0.0028	(−0.11)	−0.0106	(−0.41)	0.0107	(0.45)	0.0062	(0.26)
Firm size			0.0287	(6.70)***	0.0259	(5.83)***	0.0281	(5.92)***	0.0239	(5.70)***	0.0263	(5.89)***
Capex			0.0395	(1.53)	0.0343	(1.32)	0.0378	(1.43)	0.0299	(1.22)	0.0374	(1.51)
Age			0.0800	(5.47)***	0.0824	(5.61)***	0.0744	(4.96)***	−0.0306	(−1.87)*	−0.0489	(−2.91)***
Tangibility			−0.0753	(−2.81)***	−0.0783	(−2.90)***	−0.0867	(−3.04)***	−0.0656	(−2.57)***	−0.0769	(−2.87)***
Sales growth			−0.0092	(−0.53)	−0.0087	(−0.50)	−0.0078	(−0.45)	−0.0042	(−0.25)	−0.0031	(−0.19)
Constant	0.7805	(50.74)***	0.1968	(3.48)***	0.0903	(1.31)	0.0672	(0.89)	0.3655	(5.31)***	0.3572	(4.82)***
Industry fixed effects	No		No		No		Yes		No		Yes
Year fixed effects	No		No		No		No		Yes		Yes
Prob. (F statistic)	0.000		0.000		0.000		0.000		0.000		0.000
R-squared	0.037		0.225		0.232		0.239		0.319		0.330
Adj. R-squared	0.036		0.222		0.228		0.233		0.313		0.323
No. of firms	480		480		480		480		480		480
No. of observations	2980		2500		2500		2500		2500		2500

Estimated coefficients are reported with t-statistics in parentheses. * indicates significance at 10%; ** significance at 5%; *** significance at 1%.

Simple OLS regression of firm risk-taking

Firm Risk-taking =  (Dependent variable)	Absolute deviation from expected ROA (|eROA|)						Absolute deviation from expected Q (|eQ|)
	(1)		(2)		(3)		(4)		(5)		(6)
Explanatory variables:	w/o controls		w/ firm characteristics		w/ firm characteristics and board composition		w/o controls		w/ firm characteristics		w/ firm characteristics and board composition
Blockholding	0.0231	(4.50)***	0.0234	(4.78)***	0.0230	(4.62)***	0.1098	(5.55)***	0.0611	(3.27)***	0.0659	(3.49)***
CEO duality					−0.0016	(−0.76)					0.0182	(2.32)**
Board size					0.0075	(1.39)					0.0510	(2.54)**
Board independence					0.0041	(0.82)					0.0650	(3.47)***
Gender diversity					0.0011	(0.19)					0.0286	(1.31)
ROAt									0.3278	(5.16)***	0.3184	(5.02)***
ROAt-1									0.2259	(3.88)***	0.2291	(3.94)***
Leverage			−0.0670	(−16.53)***	−0.0659	(−15.99)***			−0.2169	(−13.78)***	−0.2067	(−13.02)***
Firm size			0.0008	(1.06)	0.0004	(0.55)			0.0086	(3.14)***	0.0057	(2.01)**
Capex			0.0068	(1.61)	0.0060	(1.41)			0.0274	(1.66)*	0.0218	(1.32)
Age			−0.0100	(−5.09)***	−0.0103	(−5.18)***			−0.0016	(−0.18)	−0.0004	(−0.04)
Tangibility			0.0040	(0.89)	0.0034	(0.74)			0.0184	(1.08)	0.0186	(1.08)
Sales growth			0.0260	(9.87)***	0.0257	(9.75)***			0.0035	(0.32)	0.0027	(0.25)
Constant	0.0465	(17.22)***	0.0713	(7.94)***	0.0619	(5.42)***	0.1090	(10.39)***	0.0389	(1.08)	−0.0643	(−1.46)
Industry fixed effects	No		No		No		No		No		No
Year fixed effects	No		No		No		No		No		No
Prob. (F statistic)	0.000		0.000		0.000		0.000		0.000		0.000
R-squared	0.006		0.132		0.133		0.012		0.176		0.185
Adj. R-squared	0.006		0.130		0.130		0.012		0.173		0.180
No. of firms	502		502		502		480		480		480
No. of observations	3136		3136		3136		2500		2500		2500

Estimated coefficients are reported with t-statistics in parentheses. * indicates significance at 10%; ** significance at 5%; *** significance at 1%.

Blundell, R., & Bond, S. (1998). Initial conditions and moment restrictions in dynamic panel data models. Journal of Econometrics, 87(1), 115–143. doi:10.1016/S0304-4076(98)00009-8

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