Market capitalization

About: Market capitalization is a research topic. Over the lifetime, 3583 publications have been published within this topic receiving 77288 citations. The topic is also known as: market cap & market value.

Agency Cost, Corporate Governance and Ownership Structure (The Case of Pakistan)

Abstract: The article attempts to investigate the role of ownership structure and corporate governance in mitigating agency cost in a sample of 50 firms selected on the basis of market capitalization from “Karachi Stock Exchange” during the period 2003 to 2006. We used the proxy asset utilisation ratio to measure agency cost. Multivariate fixed effect regression is used to analyze the data. The explanatory variables include director ownership, institutional ownership, external ownership, board size, CEO/Chair duality, remuneration structure and board independence. The results show that higher director and institutional ownership reduces the level of agency cost. Smaller sized boards also results in lowering agency cost. Board independence has positive association with asset utilisation ratio. The separation of the post of CEO and chairperson and higher remuneration lower agency cost.

The Latest Movement to Going Private: An Empirical Study

Abstract: The number of firms going private is increasing at an unprecedented rate in the current decade. The ratio of companies going private to IPOs is in the 20%-30% range. My survey includes 110 of the 236 that went private between January 2001 and July 2003 (a 46.6 percent response rate). The cost of being public is the number one reason for going private by smaller firms. This relates directly to the passage of the Sarbanes-Oxley Act in 2002. A null hypothesis of no relationship between market capitalization and going private because of cost could be rejected at an alpha level of 0.01. Of significance is that a number of smaller firms actually went private under a Form 15 deregistration by reducing their number of shareholders to under 300, but without buying in the other shares outstanding. We now have a number of private companies with public shareholders holding the majority of the shares.

The impact of the financial system on economic growth in the context of the global crisis: empirical evidence for the EU and OECD countries

Abstract: This study aims to analyze the impact of the development and stability of the financial sector on economic growth on the basis of the quantitative methods that produce robust results. The following research hypotheses are tested: /H1/ The relationship between financial sector development (stability) and economic growth is nonlinear; /H2/ An excessively large size of the financial system does not lead to more rapid economic growth: it may even negatively affect GDP dynamics; /H3/ The inclusion of the post-crisis period gives new insights of the nature of the relationship between financial system and economic growth. The analysis covers the 28 EU and 34 OECD economies and the 1993–2013 period. The following variables are used to measure the financial sector: domestic credit provided by financial sector, bank nonperforming loans, bank capital to assets ratio, market capitalization of listed companies, turnover ratio of stocks traded, and the monetization ratio. A new element of the empirical analysis is the application of the extended econometric and economic modelling, including testing nonlinear relationships, analyzing both levels and changes of the financial variables, as well as estimating the models on the basis of a moving panel with overlapping observations. The regression equations are estimated by Blundell and Bond’s GMM system estimator. Our results indicate that all the research hypotheses have been positively verified.