Relationship Of Ownership Structure On Corporate Performance In State-Owned Companies Of Pakistan Via Mediating Role Of Corporate Sustainability

Demand of business performance enlargement is expeditiously increasing and its achievement is an important concern in the contemplation of management capability and domestic enterprises.Organizational governance mechanism and corporate social responsibility system is a big controversy to this concern and become a conventional research at global level.The relationship of executives with corporate performance(CP)is also different in developing and developed economies due to the law and proprietary structure.In Pakistan,value of having reverberant SOCs to control on economic growth has generated new corporate social responsibility policies since 2013.These policies introduce new strategies in enhancing the business environment for both SOCs and non-SOCs(N-SOCs),which encourages the formal business creation environment,investment and employment possibilities.SOCs are continuously involved in achieving multiple objectives for the sake of business sustainability and conserving socio-economic circumstances of state-investments in the sector and sub-sector companies such as energy sector,transport sector,power sector,financial and so on.I made my continuous efforts in this study to conserve the SOCs for the development of N-SOCs that in turn encourages high investment occasions and enhancing the service delivery.Generally,it is believed that CP can be improved through mass production,individual employees and labor force.However,internationalization and the dynamic markets are opposed in direction of portraying the afore-mentioned traditional concepts.Similarly,these markets also claimed that certain factors do not necessarily improve the performance of the corporate or societal human organizations.Living in the current era of internationalization,researchers have been introduced many new factors among which proprietorship,executive rights,shareholders impact/ratio,organizational governance mechanisms and practices are involved.In Pakistan,there are many researchers who conducted research on the listed companies and few of them rarely have conducted the research on Pakistan's state-owned companies.This research aims to investigate the appropriate ownership structure via mediating role of corporate sustainability on CP in SOCs of Pakistan by examining the role of organizational governance,agency problems and current issue of CEO-ownership.To do so,most effective theories within the context of the developing country of Islamic Republic of Pakistan are taken into account.This study is encouraged by the following factors.First,existing studies reported in the developed countries such as United States of America(USA),United Kingdom,European countries and China.Since,this study has rarely been conducted in the developing countries because of the difference in the economic structure,business environment and developed market values of the developing countries.Second,the categories of Pakistani listed companies/ SOCs ownership-structure makes this research more encouraged and interesting,that is,ownership structure of Pakistani SOCs,N-SOCs and listed companies are very different from developed and South Asian countries.In doing so,this study explores the following issue: First,ownership structure is more effective and could provide major findings in corporate,innovative and environmental performance.Second,it is important to discuss and clarify the importance of proprietorship and rights,and the responsibilities of an executive toward corporate,innovative and environmental performance,corporate sustainability,and employment growth.Third,whether the CEOs and shareholders could enhance the corporate,innovative and environmental performance.In view of the above mentioned concerns,this study solved them one by one,as follows:First,this study deeply discusses and analyzes various types of ownership-structures which are mainly implemented in SO,N-SO and SMEs companies of Pakistan,such that family ownership,combined ownership,institutionalized ownership(where two parties are involved insider and outsider),and foreign ownership.Pakistan usually involves two kinds of ownership and they are commonly renowned as,“family ownership and concentrated ownership” as reported by World Bank in 2005.Thus,this study summarizes the term of ownership such as executive stock-holding ownership with CP in order to clarify whether the ownership is appropriate for a good CP.This study also determines the types of ownership which are usually implemented in SOCs and could work for the betterment of the business.Second,corporate,innovative and environmental performance is receiving high attention due to the critical business environment in Pakistan.There are many factors that stimulate the significance of the corporate,innovative and environmental performance.In this phase,the role of CEO and responsibilities towards the company and its performance is analyzed.This study has conducted the theoretical survey in both foreign and home countries.Further,this step is hallmark in providing some countermeasures recommendation for the betterment of state-owned companies of Pakistan.Third,responsibilities of ownership structure and the board of directors BODs towards the CP are explored in order to investigate their relationships with CP.This enables whether they are positively related with an intercession of management in terms of the board member's selection or negatively related with executive being the chairman/owner of the board.The theoretical survey discusses the relationships of CEO,shareholders impact,innovative and environmental performance with CP.Fourth,empirical evidence data is collected via structured questionnaire from SO companies operating in the emerging market of Pakistan.In addition,empirical research in this study includes descriptive statistics tests,co-relation test and analyses generated hypotheses through Analysis of a Moment Structure(AMOS)using structural equation modeling.In the sample selection,I used different sector companies of Pakistan,such as energy sector,financial sector,industrial & engineering sector,trading sector,service sector,promotional and advocacy sector,and transportation sector.Further,empirical results find a significant correlation between proprietorship and CP(CP)as well as validating the improvised hypothesis.But there is negative relationship of CEO-ownership(in the context of ownership)with CP due to the agency problem.Our findings provide more insights on executive-ownership to expedite CP management by straightening the interests of CEOs.Traditionally,firms tend to incline toward financial performance and profitability to surge shareholder's wealth.In the modern day,in addition to financial performance,innovative and environmental performance has also become a central effort.However,all firms are not flourished in the achievement of financial,innovative,and environmental performance,particularly small? and medium?sized enterprises(SMEs),which need adequate financial resources due to lack of resources and can search for opportunities to boost their performance.Therefore,satisfactory financial resources significantly contribute to financial and innovative performance.In addition,this study also involves theoretical analysis and empirical analysis method.In the theoretical analysis,variables' influence with each is evaluated whether they are positive or negative and could summarize the gaps in the theoretical conclusions.Later,the impacts of ownership structure on CP via corporate sustainability and its significance to the business performance are discussed.Finally,empirical analyses is performed.As mentioned earlier,this study investigated a model in which different variables are observed,wherein variables act as dependent,independent,and as mediating variables.Further,CP,shareholding ratio impact(Sh I),CEO-ownership,environmental performance(EP),innovative performance(IP),proprietorship(Pro)and corporate sustainability(CS)are some the major variables that are considered in the empirical analysis.The empirical results of the research model,this study finds that the proprietorship and CS have the positive and significant impact on CP,EP and IP.It has also a significant influence on CP,but the shareholders and CEO-ownership have negative impact on CP.Specifically,this present study would be helpful for the future assessment in the realm of proprietorship,CEO-ownership and CP.Moreover,this study executive the relationship of Information technology capability(ITC)that enhances firm performance,reflecting the constructs' positive relation.ICT enables continual improvements in uncertain environments,despite its extant shortcomings.This study assesses the role that ITC plays in firm performance,mediated by capital availability and sustainable competitive position(SCP).ITC can significantly contribute to SCP and firm performance,wherein capital availability and SCP play their mediating roles,strengthening the positive relation between ITC and SCP.These relations' concealment suggests that owners,managers and partners of SOCs and other policymakers must promote ITC's self-development,in order to effectively enhance financial capital productivity and to achieve superior performance in turbulent markets.The results generalizability is restricted to SOCs in Pakistan,yet it would be challenging to explore this study's relations in other emerging economies.This study also sheds the light on financial resources that significantly contribute to financial and innovative performance but play an insignificant role in environmental performance as well.In addition,firms with enough financial capital recognize new opportunities significantly via opportunity recognition mediator,where partially mediating the relation between financial availability and financial/innovative performance.However,firms fully mediate the link between financial availability and environmental performance.Our research findings recommend CEOs and top managers to utilize their financial resources in an efficient way to achieve the advantage of the new opportunity recognition,superior financial,innovative,and environmental performance.