Bank-firm equity-based relationships and firm's performance: Evidence from Islamic and conventional banks of OIC countries

Artikel

We examine the relationship between bank's equity ownership and corporate financial performance based on cross-sectional data through 2SLS estimation model. Our evidence is based on listed 3203 non-financial firms of 16 Organization of Islamic Conference (OIC) member states with dual-banking system (Islamic and Conventional). Consistent with notion of previous empirical studies, we document a positive impact of both Islamic and Conventional bank-firm equity-based relationships on firm's performance. The study suggests that the presence of bank equity ownership mitigates agency cost and information asymmetry problems, which in turn increase the firm's performance. Hence, the market participants such as portfolio managers may consider the role of financial intermediaries during the construction of risk minimization strategies.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Journal: Cogent Business & Management ; ISSN: 2331-1975 ; Volume: 8 ; Year: 2021 ; Issue: 1 ; Pages: 1-28 ; Abingdon: Taylor & Francis

Classification and Topics

• Classification: Management ; Investment Banking; Venture Capital; Brokerage; Ratings and Ratings Agencies ; Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill ; Firm Performance: Size, Diversification, and Scope
• Subject: Bank-Firm Equity-Based Relationships ; Islamic Banks’ ; Equity Shareholdings ; Conventional Banks’ ; Equity Shareholdings ; Firm’ ; s Performance ; OIC

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Khan, Shahbaz ; Baig, Nida ; Hussain, Shahzad ; Usman, Muhammad ; Manzoor, Humera
• Event: Veröffentlichung
• (who): Taylor & Francis
• (where): Abingdon
• (when): 2021

Further information

• DOI: doi:10.1080/23311975.2021.1974291
• Handle: http://hdl.handle.net/10419/245128
• Last update: 10.03.2025, 11:42 AM CET