Insider Ownership and Firm Value: One Shape Does Not Fit All

Nilanjan Basu, Imants Paeglis and Melissa Toffanin

Critical Finance Review, 2024, vol. 13, issue 3-4, 465-500

Abstract: et al.et al.We examine the lack of consensus in the literature about the impact of insider ownership on firm value. We apply non-parametric and semi-parametric methods to analyze various subsamples based on firm size, age, index listing, and institutional ownership. Sample selection is an important determinant of the discord in the literature. Different subsamples lead to widely different estimated ownership-firm value relationships—from upward sloping to downward sloping to flat to V and inverse-V. We replicate and show this for four influential papers (Agrawal and Knoeber, 1996; Himmelberg , 1999; McConnell and Servaes, 1990; Morck , 1988). By cataloguing systematic differences across subsamples that mirror corresponding disagreements among existing studies, we provide a unifying perspective on the literature.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:now:jnlcfr:104.00000143

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