IUGJEBS

ISSN 2410-5198
Vol 24, No4, 2016, pp 82-98

)2012/08/20( ‫ تاريخ قبول النشر‬،)2012/04/15( ‫تاريخ اإلرسال‬

*،1
‫ علّام محمد موسى حمدان‬.‫د‬
‫هيكل الملكية في الشركات المدرجة في‬
2
‫ عادل محمد يسلم السريع‬.‫د‬
3
‫ محمد سالمة عناسوه‬.‫د‬
‫بورصة البحرين ودوره في تخفيض‬
‫تكاليف الوكالة‬
*

E-mail address: ahamdan@ahlia.edu.bh

:‫الملخص‬

(Firm fixed- effect approach) (2002-2014)

:‫كلمات مفتاحية‬

The Role of Ownership Structure in Reducing Agency Costs in Bahraini Listed

Firms

Abstract

This paper aims to shed lights on the role of ownership structure in Bahrain listed firms, and its role in reducing agency
costs. The ownership structure is divided into four basic components mainly, concentrated ownership, board members'
ownership, institutional ownership, and foreign ownership. The data were collected based on longitudinal data which
consist of (31) firms for time series extends to (13) years (2002-2014). By using the firm fixed- effect approach. The
findings of this paper reveal that the components of the ownership structure could lead to a negative role in the
Agency's costs of Bahraini listed firms, with the exception of the board members' ownership, which lead to a positive
role but not totally effective in reducing agency costs.

Keywords:

Ownership structure, Agency theory, Agency cost, Bahrain Bourse.

82 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

 MacMillan et al., (2004)

38 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

(Craswell et al., 1997; Shleifer and Vishny, 1997;
Huddart, 1993; Zeckhauser and Pound, 1990

Bhattacharya and Ravikumar, 2001

Jensen and Meckling
(1976)
(Pivovarsky, 2003; Sanda, Mikailu and Garba,
2005; Joh, 2002; Xu and Wang, 1997)

Chernenko, et al.,
(2012)

(Khamis, Hamdan, and Elali, 2015)

Abuserdaneh, Zureikat & (Fleming et
Al-Sheikh, (2010) al., 2005)

38 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

(Chung and
Milgrom and
Zhang, 2011)
Roberts, 1992

Hamdan and Al-

Sartawi, (2013)
(Fleming et
al., 2005)

Pound, (1988)

Doukas et al., 2000 Singh and Davidson, 2003

(information asymmetry) (Jensen andMeckling, 1976)

(LaPorta et al., 1999)

(Frith et al., 2008)

(McKnight and Weir,

Brickley, Lease, and Smith, 2009)
(1988)

38 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

 (Frith et al., 2008; Ang et al., 2000) (Anderson et al., 2001)

(Boardman et al.,
1994)

(Agrawal and Knoeber,

1996; Seetharaman et al., 2001; Fleming et al.,
2005)
(IFC)

(Jensen, 1986)

(Fleming et al., 2005)

(Singh and Davidson, 2003)

(Doukas et al., 2000; Fama & Jensen, 1983)

‫دددد م ل دددد ي م دددد م‬ ‫دددد م‬ ‫ للمزي د د د د مومع د د د د متي د د د د م د د د د م‬1

www.bahrainbourse.net

38 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

 5 3 8
9 3 12
5 0 5
7 2 9
2 1 3
3 2 5
31 11 42

(Ang et al., 2000)

(Concentration ownership)
(Managerial ownership)
(Institutional ownership) ( (Assets utilization ratio)
(Foreign ownership) Singh & Davidson, 2003; Florackis & Ozkan, 2008;
Jensen and McKnight Weir, 2009; Henry, 2010)
Meckling, (1976)

38 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

 (Khamis et al.,
2015)

Ang et al., (2000)

(Shleifer & Vishny, 1986, 1997; Agrawal &

Mandelker, 1990)

(Frith et al., 2008)

(Jensen, 1986) (Henry, 2010)

(Hamdan & Sartawi, 2013)

(Ang et al., 2000)
Grossman and Hart (1982)

33 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

 (Myers &
Majulf, 1984; Williams, 1987; Lasfer, 1995; John,
2010)

Jarque-Bera
(Gujarati, 2003)

Jarque
-Bera

486.2 6.973 1.963 0.000 1.941 0.367 0.292

(0.000)

35.6 1.515 0.139 300 26 000 98 900 23 600 59

(0.000)

280.0 14.478 3.463 0.000 47.140 9.900 3.342

(0.000)

28.1 2.029 -0.463 0.000 94.510 26.869 54.736

(0.000)

38.2 1.989 0.597 0.000 94.510 30.000 31.630

(0.000)

35.2 1.533 0.162 0.000 1.155 0.321 0.431

(0.000)
12,344,4 2,128,95
39.4 16.952 3.822 4,008 775,144
88 5
(0.000)

1.5* 3.310 0.001 14.000 54.000 9.893 25.816

(0.474)

(Median)
(Mean)

38 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

 (Two Independent Samples T Test)

(Kolmogorov- Smirnov Z Test)

(p-value)

Z-test t-test
2.299*** -3.917*** 2 21
(0.000) (0.000) 5 35
2.458*** 5.689*** 0 51
(0.000) (0.000) 8 23
3.245*** -6.909*** 2 16
(0.000) (0.000) 5 40
3.149*** -7.182*** 7 15
(0.000) (0.000) 8 40

(Hamdan & Sartawi, 2013)

89 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

 Agency Costsit
(t) (i)

β0

β1..8
(i) ConcOwnit
(t)

MangOwnit
(t) (i)
InstitOwnit
(t) (i)
(i) ForeOwnit
(t)
(i) Leverageit
(t)
(t) (i) Sizeit

(t) (i) Ageit

(dummy variable) Industryi,t

εit

Unit Root
Agency Costs it   0   1ConcOwnit   2 MangOwnit
  3 InstitOwn it   4 ForeOwnit
(Stationarity)
  5 Leverageit   6 Sizeit   7 Age it
  8 Industryit   it .............. (1)
(Covariance)

89 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

 (Lag)
(Gujarati, 2003)
(Augmented
(1st difference) Dicky-Fuller test ADF
(Phillips-Perron PP)

(non-stationary) PP ADF
(p-value) Fisher Chi-square

PP ADF PP ADF
Agency
238.149*** 135.603*** 94.853*** 150.914*** Costs
(0.000) (0.000) (0.005) (0.000)
23.770*** 7.1125*** 5.216*** 5.129*** ConcOwn
(0.000) (0.000) (0.000) (0.000)

18.755*** 16.499*** 5.767*** 0.746 MangOwn

(0.000) (0.000) (0.000) (0.990)
17.296*** 6.831*** 4.959*** 4.926*** InstitOwn
(0.000) (0.000) (0.000) (0.001)
6.839*** 5.046*** 3.174** 1.595 ForeOwn
(0.000) (0.001) (0.033) (0.470)
274.200*** 124.538*** 79.863* 70.403 Leverage
(0.000) (0.000) (0.063) (0.217)
194.234*** 101.805*** 49.713 45.866 Size
(0.000) (0.001) (0.870) (0.938)
12.401*** 6.279*** 5.644*** 5.646*** Age
(0.000) (0.000) (0.000) (0.000)

(firm
fixed-effect approach FE)
(random-effect approach RE)

(Gujarati, 2003)

89 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

 (Variance Inflation Factor VIF)

(VIF)
(VIF)

(Hausman
Test)
(R2)
(EF) (FE)

(FE)

(2)

(General Linear
(Frith et al., 2008)
Model GLM)

(Tolerance) (Collinearity Diagnostics)

88 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

 (F) (T)
T (β =8) (n-β-1= 403-8-1= 394)
p-value

VIF
t-Statistic β

9.168*** 0.829 Constant

(0.000)

-5.286*** -0.365 1.095 ConcOwn

(0.000)

0.050 0.001 1.099 MangOwn

(0.960)

-6.609*** -0.005 1.791 InstitOwn

(0.000)

-2.241** -0.002 1.772 ForeOwn

(0.026)

0.455 0.032 1.892 Leverage

(0.650)

-3.788*** -0.046 1.900 Size

(0.000)

1.028 0.002 1.296 Age

(0.305)

0.583 R
0.340 R2
26.917*** F-Statistic
0.000 p-value (F)
13.119 Hausman Test (Chi2)
0.037 p-value (Chi2)
2.241 Durbin-Watson stat

Ang et al., (2000)

88 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

 Henry, (2010)

(Doukas et al., 2000; Fama & Jensen,

1983)

88 IUG Journal of Economics and Business (Islamic University of Gaza) / CC BY 4.0

 a

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