The Impact of Business Strategy between Corporate Ownership and Investment Efficiency

Abstract

In this study, the effect of firm strategy—prospector and defender—on successful investments in various ownership arrangements is investigated. The non-financial firms listed on the Pakistan Stock Exchange (PSX) between 2011 and 2020 are the subject of this study, which is the first of its kind. The analyses included a generalized least squares (GLS) regression model for data analysis techniques. The findings of the study demonstrate that the prospector approach favourably moderates the link between concentrated ownership, institutional ownership, and managerial ownership, while adversely affecting the correlation between family ownership and investment efficiency. In contrast, the family ownership-investment efficiency is favourably moderated by the defender strategy. However, defender business strategies with management ownership are unaffected. Checks, alternate measurements, and model specifications all corroborated these conclusions. To make a new investment and achieve effective business performance, practitioners and investors alike need pay close attention to the research factors.