Equity ownership and performance

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Corporate governance has garnered significant attention in the corporate finance literature over the past decade, particularly following numerous governance failures that have led to the introduction and refinement of various national and international codes. The need for regulatory action is underscored by the necessity to understand the potentially negative impacts of ownership structure on financial performance. However, existing empirical literature has produced inconsistent evidence, leaving the overall effects ambiguous. This inconsistency is attributed to biases in statistical analysis, particularly endogeneity and simultaneity bias. The objective of this dissertation is to yield less distorted results by modeling various ownership aspects and performance simultaneously. It begins with a simultaneous equations analysis of the relationship between general ownership concentration and performance, followed by an exploration of specific ownership effects, focusing on managerial and institutional ownership. The author then integrates these models into a comprehensive analysis that enables the simultaneous assessment and separation of different ownership and performance effects. This state-of-the-art analysis significantly contributes to the existing international empirical literature on corporate ownership and performance, aiming to inspire and gain acceptance among corporate governance researchers and practitioners.