Agency expenses and conflicts that may arise between the owners of the organization and executives are reduced by good governance (Alanazi, 2019). Based on various perspectives, “Corporate Governance is the mode through which substances are overseen and represented.” The ownership structure is one of the most important corporate administration factors impacting the extent of agency costs of a firm (Arosa et al., 2010). The distribution of shares among owners has been characterized as the ownership structure in previous studies (Khan et al., 2022), which refers to the stake holdings of families, state, foreign, institutions, managerial, and associates in a growing market (Zureigat, 2015). The opposing perspective on ownership structures focuses on the mix of ownership concentration and control that results from the consequences of the agency dilemma (Fama and Jensen, 1983). This mix permits controlling shareholders to separate private advantages from the firm to the disadvantage of minority shareholders. This inside control system is critical in deciding the destinations of firms, investor riches, and the degree of discipline of managers (Jensen, 2003). The ownership mechanism is equally important to be scaled and measured for the causal effect on the performance of the firm not only in the developed markets but also in emerging ones (Iwasaki et al., 2022). One of the influential mechanisms in reaping the firm performance as per agency mechanism is ownership of possessions by various groups (Alkurdi et al., 2021). Principal-agent mechanism considers each ownership stakeholder as a monitoring force to comply with the primary goal of the firm, i.e., wealth maximization for stockholders. The mechanism of stakeholders supports the finding that resource management in the firm becomes efficient because ownership possessions of stakeholders reduce the expropriation of resources by the managers (Khan and Zahid, 2020). Agency and stakeholder outlooks help firms reduce agency costs. This study deemed these two viewpoints to overcome agency issues in Pakistan.

To cater to governance issues, more than 400 codes have been issued globally since 1992. The Securities and Exchange Commission of Pakistan (SECP) incorporated a code of corporate governance in 2002. This improved the oversight of the board and related matters to enhance the quality of internal control. The 2002 code was further revised in 2012, 2017, and 2019, respectively. The latest codes were gradually strengthened by the inclusion of mandatory provisions concerning board independence, diversity, directorship, respective committees, and/or auditing measures (Khan et al., 2022).

State-owned enterprises expect a fundamental capacity in countries with transitory economies to create integration in the market (Li, 2018). The internationalization of state-owned enterprises has become a major trend in the global economy. State multinationals contribute abroad to get information, innovative and managerial capacities, brands, and other key resources they need (Aleksei, 2018). The job of state-owned elements in a market economy is to advance proficiency in asset allotment (Zhou and Xie, 2016). State-owned enterprises are known by many names, such as government organizations, government business enterprises, government-connected organizations, public enterprises, and public area units (Kenton, 2019). The relationship between company performance and firm valuation was moderated by state ownership (Djankov and Murrell, 2002). Management was believed to be equipped for changing the level of division between the interests of stakeholders (Estiasih et al., 2019). According to the literature, company performance improves with increased ownership, and management interest scheming converges with increased ownership concentration (Katper et al., 2018).

Checking done by the supervisor can influence the movement of the directors of the organization to expand the worth of the organization by comprehensively revealing every one of its resources, and remembering the immaterial resources of the organization for the fiscal reports (Rafaizan et al., 2020). If an administrative proprietorship develops, the director will be bound to further develop execution to help the worth of the organization by uncovering the scholarly capital of the organization. The more prominent the administrative possession, the more intelligent capital is uncovered in the budget summaries (Rafaizan et al., 2020).

The performance and self-serving behavior of managers are assessed by financial performance measures installed by the directors (Katper et al., 2018). Foreign ownership is decidedly identified with greater improvement performance considering the way that new examiners can bring important assets, particularly monetary assets and trendsetting innovations for development exercises (Nguyen-Van and Chang, 2019). Foreign ownership is overall considered to be an important method for acquiring capital, high innovation, and the abilities of the executive to the firm. These assets help to further develop governance and execution (Meng et al., 2018). Possession fixation is seen as a critical corporate administration instrument as owners with concentrated shareholdings sway the exercises and the leaders of an association (Altaf and Shah, 2018). The higher ownership concentration can safeguard minority shareholders from the capture of business visionaries and work on corporate execution, which resembles corporate governance (Kim, 2019). The oversight of the board has a favorable impact on how ownership concentration affects performance (Guerrero-Villegas et al., 2018).

In privately owned companies in emerging economies like Pakistan, one investor from a family owns an enormous part of the stock, and relatives are selected for the chief and functional positions. If the level of chiefs hits a specific level, they might be convinced to introduce a more engaging monetary and execution articulation. Furthermore, managing the behavior of managers allows significant owners to influence the decisions and actions of the firm (Shiri et al., 2018). The variability and temporal fluctuations in the absorptive capacity of the firm can be influenced by family ownership. Family ownership can have an impact on the progressive design and informal social ties of the company, limiting the types of knowledge that can be gained, assimilated, changed, and utilized (Kotlar et al., 2020). All things considered, from an agency perspective, family ownership can decrease review hazard appraisal, lower expenses to support inward checking, and diminish incompatible situations between corporate chiefs and proprietors (Khan and Subramaniam, 2012). Institutional financial backers can assume a fundamental part in checking the organizations, the executives, and their ventures or disinvestments in organizations. Their professional foresight brings prosperity to the firm (Nashier and Gupta, 2016). Institutional financial backers help firm chiefs take advantage of scattered small shareholders (Lin and Fu, 2017).

Keeping the preceding discussion in view, the study aims to determine how the various possessions of stakeholders affect the economic, financial, and stock market execution of non-financial enterprises listed on the Pakistan Stock Exchange. Pakistan is a developing economy with only one national stock market on which a wide range of investors (individuals and institutions, foreign and local, and governmental and non-governmental) can trade and invest in listed companies. The major portions of the stock market concerning the number of firms represent non-financial firms. Being an emerging economy and one of the major economic indicators, the stock market is very attractive for generating returns in the region. However, at the same time, it is considered a very volatile market. Therefore, different stakeholders and ownership perspectives want to protect their wealth. This makes it evident to conduct such a study and gives hints to the stakeholders on how to save their interest by using the effect of ownership structures on firm execution. Another important point is that this is also going to become empirical evidence by highlighting the supervisory role of the board. The more the board is active, the more it can play a significant role in creating harmony between the expectations of stakeholders and firm execution. Various studies (Jabeen and Ali, 2017; Farooq and Manzoor, 2019; Usman and Alam, 2020; Hussain et al., 2022) have been done on the relationship between ownership and performance in Pakistan. They gave empirical evidence on ownership studies and asserted that ownership has become a prominent tool to gauge the performance of the firm. The agency problem from the ownership context has not yet been properly addressed in the Pakistani context because of the limited scope taken in the previous studies, especially when various stakeholders become part of ownership. Keeping in view the context of agency theory and stakeholder theory, Khan et al. (2022) recommended a comprehensive study on ownership formation to address the agency issue. Additionally, board insertion at the time of pursuing the respective interests of each stakeholder was also required to be addressed. This study responded to both by conducting a comprehensive framework on ownership, possession, and board activeness and focusing on agency issues.

Researchers, investors, practitioners, and politicians can all benefit from this study. The research gives decision-makers and practitioners in-depth knowledge about the risks connected with the state, related concerns, foreign, ownership concentration, and institutional and family ownership on business execution in terms of non-financial firms. The findings of the study are anticipated to be helpful to investors in their investment decisions, particularly regarding ownership by the government, related businesses, institutions, and foreigners. First, the management of the firm should specifically use the state entry in the ownership. The policies of the firm should be in accordance with Pakistani government laws and regulations. As a mentor, the state finances the use of the resources by firms. The firm is more secure as it is closer to the state. Second, the study showed how helpful associated companies are to the business. The company should use the purchasing of associates, selling, and credit services. Third, the results of the numerous studies consistently show that institutions in the ownership act as guardian angels of a firm, not only by providing financial support but also by addressing problems with the agency. Management can illuminate its credit darkness by the optimal linkage with the institutions. Fourth, the strength of the overseas portfolios provides a very obvious signal that the management of the firm should use foreign holdings to access international markets. Fifth, management must look out for the interests of the family and key stakeholders. When there are conflicting results, the role of other stakeholders becomes crucial. Sixth, efficient boards get rid of all the obstacles to increased performance. They manage the harmful externality that exists between agents and principles. Seventh, when the board interacts with stakeholders, an effective management plan is required. Market participants have a huge impact on the Pakistani market. To maintain the interest of everyone, it is important to closely monitor the varied outcomes of the interactions of stakeholders with the board.

The article is structured as follows: after the preliminary discussion in the section “1 Introduction,” literature regarding the causal relations of the study and their respective hypotheses are outlined in the section “2 Literature review and hypothesis development.” Research methodology explained the data, methods, techniques, and variables in the section “3 Research methodology.” A causal relation is examined in the section “4 Results and discussion,” followed by the conclusion of the study.

The agency theory, according to Eisenhardt (1989), is concerned with the universal agency connection, in which the principle assigns tasks to the agent. In terms of business organizations, the agency theory entails a contract in which the shareholders engage the management to provide some function on their behalf, including assigning certain decision-making authority to the managers (Jensen and Meckling, 1976). The stakeholder theory is a hypothesis about the connection of a company with its stakeholders. Shareholders, creditors, employees, public interest groups, customers, suppliers, governmental agencies, and the community are among the stakeholders identified as having a stake in a firm and having something at risk (Chiu and Wang, 2015). Shao (2019) provided a wide-growing assessment of the association between corporate administration plans and firm execution in Chinese recorded firms from 2001 to 2015. Ownership positions suggested differential performance execution. Buallay et al. (2017) respond to the question, “Is there any connection between CG and firm execution?” The ownership structure was found significant for the performance. Mashayekhi and Bazaz (2008) showed that the presence of institutional financial backers on the top managerial staff was decidedly connected with firm execution. Zraiq and Fadzil (2018) achieved the essential objective by analyzing the connection between ownership development and firm execution of the Jordanian firms. Their discoveries demonstrated an altogether sure connection between possession structure (family and other) and firm execution. Kapopoulos and Lazaretou (2007) explored that a more careful proprietorship structure decidedly connects with higher firm productivity.

This study was explanatory in nature based on the quantitative method being conducted on listed companies of the Pakistan Stock Exchange by choosing non-financial firms as a sample study. The data for the post-global financial period (i.e., 2009–2018) were manually extracted from the audited annual financial reports of non-financial listed firms in the Pakistan Stock Bourse (PSX). These reports have been submitted to the SECP and are also available on the official websites of the PSX and the concerned listed firm. The explained factors were as follows in Table 1: operating performance was measured by total income to total sales (Hussain and Waheed, 2019). Financial performance was measured by net income to total assets (Hussain and Waheed, 2019). The market-to-equity ratio was measured by the market value per share to book value per share (Hussain and Waheed, 2019). Explanatory factors were as follows: state ownership was measured by the total shares owned by the state to the total number of shares (Vu and Pratoomsuwan, 2019). Foreign ownership was measured by the percentage of foreign investor shares to total shares (Ciftci et al., 2019). Associated companies were measured as the percentage of shares held by associated companies (Shao, 2019). Ownership concentration was measured by the largest ten shareholding percentages and the largest five shareholding percentages (Shao, 2019). Institutional ownership was measured by the percentage of the number of shares owned by the institution to the total number of shares outstanding (Handriani and Robiyanto, 2019). Family ownership was measured by the percentage of shares owned by the founders and their family members over the total shareholdings in the firm (Subramaniam, 2018). Board activeness was used as a moderating aspect and was measured by the number of annual meetings of the board of directors (Vitolla et al., 2020). Control factors were the firm size, age, and leverage. The natural logarithm of total assets was used to calculate the firm size (Ullah et al., 2017). The firm age was calculated using the natural log of the firm age from the date of incorporation (Ciftci et al., 2019). The firm leverage was calculated as total debt/total equity (Shao, 2019).

The following multiple regression models was built to explore the moderating influence of board activeness on the relationship between corporate ownership structure and firm execution for all non-financial firms listed on the Pakistan Stock Exchange during the period 2009–2018. Following the panel regression model, the proposed relation was measured where performance, as an explained variable, was operationalized by operating, financial, and stock market performances.

The descriptive analysis, as shown in Table 2, provides insight into the behavior of the variable. The average performance of the operating, financial, and stock market perspectives of the firms was in positive zones, but their deviation was greater than their average performances. The minimum and maximum ranges showed wide deviation values, which depict the volatility in the profitability of the non-financial firms of Pakistan. The same is true for the other variables of the study, especially the explanatory factors. The state owned 2.07% stakes in the firms, which increased to 85.25%. Associated companies owned 27.53%, ranging to 98.02%. Institutions held 21.9% stakes in the firms, with a maximum of 73.4%. Foreigners acquired 3.06% of shares, with a maximum holding of 76.91%. The average holding of the families of the firms was 17.82%, with a maximum stake of 97.71%. The average value of the ownership concentration in the hands of the top five holders was 60.82. The average number of meetings held during the period was 5, with a maximum of 19.

Table 3 demonstrates the relationship. The relationship between the operating, financial, and stock market performing areas of the firms and the explanatory factors was mixed. Among all the explanatory variables, institutional ownership and family ownership had a negative relationship with operating performance. Ownership of the state-associated companies, foreigners, ownership concentration and board activeness showed a negative association with financial performance. Ownership of the state, institutions, and families and ownership concentration showed a negative association with the stock market. Pairwise correlation among the explanatory variables did not posit any issue of collinearity; however, the multicollinearity test was separately run, which asserted that multicollinearity was not a problem in all panel regressions. The Breusch–Pagan test was run to test the issue of heteroskedasticity. The outcome of the test depicted heteroscedasticity issues in almost all the models. To cover this problem, panel regression analysis with robust standard errors was applied to all models to explain the results. Various econometric techniques are used to evaluate the influence of a cause over effect. After diagnosing the multiple linear regression assumptions, optimal estimates were extracted using the panel OLS method (Abedin et al., 2022; Amin and Haq, 2022; Pierni et al., 2022).

Panel regression analysis of all performing parameters (operating, financial, and stock market) is described in Tables 4–6, respectively. All the tables describe the results of panel regressions with robust standard errors to overcome the heteroskedasticity issue. State ownership (SOWN) inferred a positive influence on the operating outcomes of the firms. The assertion was consistent with the financial and stock market performing areas and was also aligned with Eforis (2018), Boubakri et al. (2020), Aguilera et al. (2021), and Wang and Jiang (2021). It supported the first hypothesis. The emerging economy of Pakistan gets a fruitful insight from this result that state ownership improves the productivity of the firm. Associated companies (ASOWN) influenced the operating, financial, and stock market outcomes. The significance of the result supported the second hypothesis and the study of Rafaizan et al. (2020). The consistency of the results recommends the associated companies as stakeholders of the firm. The operational, financial, and stock market performance were also impacted affirmatively by institutional ownership (IOWN). The finding of this study with respect to institutional ownership was in support of the third hypothesis and in line with Nashier and Gupta (2020), Alkurdi et al. (2021), Drobetz et al. (2021), and Saleh et al. (2022), revealing that institutional ownership has an efficacious force on firm execution. This outcome has various theoretical aspects, such as agency theory and resource dependency theory.

Foreign ownership (FOWN) also sent a positive signal to the operating, financial, and stock market areas. Firms improved their performances with foreign stakes. The finding of this study with respect to foreign ownership is consistent with Jusoh (2016), Rashid (2020), Din et al. (2021), and Iwasaki et al. (2022), supporting the fourth hypothesis that ownership by a foreigner has an efficacious and consequential association with profit margin, ROA, and Tobin’s Q. Family ownership (FAMOWN) showed mixed results, having negative associations with operating margins and positive ones with financial performance. The result partially supported the fifth hypothesis and conformed to Jadoon et al. (2021). This may be due to mixed opinions about the family stakes in Pakistan. It is generally considered in Pakistan that most firms have been operating with the majority of family members. Family stakes have been incorporated to overcome the negativity of external forces. When family members work as CEOs, top managers, chairpersons, or directors of companies, the pragmatic link is extremely strong (Chu, 2011).

The results of the effect of OWNC (ownership concentration) on top block holders were partially consistent with Anwar and Tabassum (2011), Alkurdi et al. (2021), Martínez-García et al. (2021), and Queiri et al. (2021) and had mixed influence on performing areas. In all the stepwise regressions, the major influence of the concentration was negative, therefore, partially supporting the sixth hypothesis. The coefficient value of BACTIVE (board activeness) fully supported the seventh hypothesis and demonstrated the aligned influence of the board activity on the performance execution as with Vitolla et al. (2020) and Queiri et al. (2021). This result inferred that board activity in the participation in the interim meetings brought fruitful results for the firms. After the separate effects of each phenomenon of the explanatory factors, the interactional effect of board activeness was depicted stepwise in Tables 4–6. The moderating effect of the board activeness with all the ownership stakes demonstrated mixed and differential influence, which partially supported the eighth hypothesis.

The study was conducted to analyze the effect of state, associated companies, foreign, ownership concentration, and institutional and family ownership on firm execution. The moderating effect of board activeness on the relationship between the structure of corporate ownership and firm execution was also measured. Ownership held by the state, associated concerns, institutions, and foreigners showed consolidated results and fully supported the hypothetical relationships. These ownerships were fully favoring the operating, financial, and stock market performances of the firms and sent the signal to stakeholders to take their ownership stakes accordingly. Family concerns and ownership concentrated in firms demonstrated mixed results. Board activity in the form of interim meetings fully supported the firm performance and code of law, which asked the firms to meet more to discuss and decide about the fortune of the firms positively. The moderating effect of board activity with all the ownership stakes posited differential outcomes for the firms. Most of the interactional influence was negative and not in favor of the firm.

This study is generally supportive for researchers, investors, practitioners, and policymakers. The study provided in-depth information about the stakes of state, associated concerns, foreign, ownership concentration, institutional, and family ownership on firm execution in terms of non-financial firms to practitioners and policymakers that can help them in decision-making. The results of the study are expected to be valuable for investors in their investment dealings, especially concerning ownership by the state, associated concerns, institutions, and foreigners. Specifically, the management of the firm should utilize the state entry in the ownership. Policies being drawn by the firm should be aligned with the rules and regulations of the Pakistani state. As a mentor, the state subsidizes the resources to be utilized by the firm. The more the firm is attached to the state, the safer it is. Second, the study highlighted that associated companies are very kind to the firm. The firm should avail of the buying, selling, and credit services of the associates. Third, the perpetual consistency of the results of the various studies asserts that institutions in the ownership prove to be an angel for the firm not only in providing a monetary cushion but also in resolving agency issues. Management can illuminate its credit darkness by the optimal linkage with the institutions. Fourth, the positivity of the foreign portfolios gives a very clear note that the management of the firm should avail the foreign stake to grasp the foreign markets. Fifth, management needs to take care of the family and concentrated stakes. The role of other stakeholders becomes important at a time of mixed results. Sixth, effective boards eradicate all the hassles in the way of improved performance. They control the negative externality between principles and agents. Seventh, an effective management strategy is demanded at the time of interaction between the board and the stakeholders. Market players exert a very gigantic influence in the Pakistani market. The varied outcome of the interaction of the stakeholders with the board needs to be watched to keep the interest of each one intact. The study is mainly focused on the non-financial sector for a specific time duration, and the results of the study may not be generalized to financial firms. Therefore, a comprehensive study involving financial and non-financial firms can be conducted for better results in future.

The raw data supporting the conclusions of this article will be made available by the authors, without undue reservation.

FY: overall supervision and analysis. RH: consolidating the sections and initial draft. IK: literature review and methodology. ML: review and editing. All authors contributed to the study.