Ownership structure, corporate goverance and financial performance of public listed companies in Singapore

The object of this empirical study is to clarify, consolidate and build on various conflicting research findings on the relationships among ownership structure, corporate governance, and corporate performance using data from 149 Singapore public listed companies. This study contributes to our understanding of these relationships by examining the total continuum of ultimate ownership structures measured by control rights within a single economic and legal research context and various performance measures. Adapting the approach advocated by Agrawal and Knoeber (1996), the seven governance control variables used in this study are self monitoring by the inside manager-shareholder, monitorings by outside blockholders, institutional investors, government shareholders, independent directors, market for CEO, and bank and financial institutions. This study firstly shows an interesting pattern of interrelationships among the corporate governance mechanisms which evolve so as to minimise systemic agency costs if the corporation has in place an optimal mix of the governance control mechanisms. The more general pattern of the interrelationship is that of substitution while the two special cases of complementary interdependence exist.