Does Ownership Structure Influence Performance?
Keywords:
Ownership structure, firm performance, agency theoryAbstract
Through this study, an attempt was made to find how ownership structure impacts performance of companies. It was expected to have positive impact of ownership structure on the performance of company, since promoters of many companies engage in consolidating their stake in companies. To probe this phenomenon, NIFTY 50 was chosen for the study period of six years i.e. from FY 2011-12 to 2016-17. Firm performance, the dependent variable, was measured through price-book ratio (P/B ratio). The independent variables include shareholding of promoters, foreign institutional investors (FIIs), domestic institutional investors (DIIs) and non-institutions. The size, measure through log of total assets (Log TA) and leverage, were taken into study as controlling variables. The OLS regression analysis exhibited statistically significant and positive impact of promoters’, foreign institutional investors’, non-institutional investors on performance of companies, whereas domestic institutional investors observed to have significantly negative impact on performance.
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