Does Ownership Structure Influence Firm Value? Evidence from India

Jayesh Kumar ()

Finance from EconWPA

Abstract: This paper examines the effect of ownership structure on the firm performance for an unbalanced panel of 2478 Indian corporate firms from 1994 to 2000. We examine the effect of interactions between corporate, foreign, institutional, and managerial ownership on firm performance. Using panel data framework, we show that a large fraction of cross- sectional variation, in firm performance can be explained by unobserved firm heterogeneity. We provide evidence that the shareholding by institutional investors and managers affect firm performance non- linearly, after controlling for observed firm characteristics and unobserved firm heterogeneity. We also find that the equity ownership by foreign and corporate shareholders do not influence firm performance. We find no evidence in favor of endogeneity of ownership structure.

Keywords: Corporate Governance; Ownership Structure; Firm performance; Panel Data; India. (search for similar items in EconPapers)
JEL-codes: G32 G34 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-acc, nep-cfn and nep-cwa
Date: 2004-06-20
Note: Type of Document - pdf; pages: 48
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Persistent link: http://EconPapers.repec.org/RePEc:wpa:wuwpfi:0406008

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