Explicating the contextuality of corporate governance through ownership structure and family management: evidence from an emerging economy

Purpose This study aims to investigate the impact of family management and ownership structure, including foreign ownership and business group ownership, on corporate performance. Design/methodology/approach Using an agency perspective and a quantitative research methodology, this study examines listed firms in Pakistan from 2009 to 2018. Findings The results suggest that family management and concentrated leadership constrain, whereas family leadership, foreign ownership and group ownership strengthen monitoring effectiveness and corporate performance. These findings imply that the shareholder governance logic offers optimal solutions in an emerging economy, as relational governance may activate agency problems. Originality/value The findings are consistent with the relevance of relational governance mechanisms in the form of family leadership. However, the results suggest that emerging economies require a hybrid governance model to address their unique agency problems, thereby underlining context relevance in corporate governance scholarship. Furthermore, this research adopts a thick view of institutions to clarify institutional embeddedness and corporate governance contextuality in an emerging economy.