Ownership Structure and Corporate Performance

摘要

Previous studies of ownership structure mainly focus on the relationship between insider ownership and corporate performance. However, empirical results have failed to provide consistent evidence to prove whether the type of ownership does significant affect firm performance. Our paper fills this gap by classifying different types of shareholders (individual shareholders and institutional shareholders) and observes their relationship with corporate value respectively. In addition, we examine quarterly panel data and indirect ownership to address the problem of endogeneity argued Demetz (2001). udOur results show that only institutional ownership has consistent and significant relationship with firm value in both yearly regressions and panel data regression, while the relationship between individual ownership and firm value is not significant. Institutional ownership first decreases then increases firm value as institutional shareholders hold higher stakes in the firm. However, the effect of institutional ownership is counteracted when individuals have unexpectedly high levels of ownership. We also find that if institutional shareholders acquire more shares during a quarter, the change in firm value during this period is positive. Our results support the hypothesis that firm value creation is higher if the largest shareholder is an institutional investor.ud