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Hidden Ownership and Firm Performance: Evidence from Thailand’s Initial Public Offering Firms

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  • Natthawut Wangwan

    (Department of Finance, Faculty of Commerce and Accountancy, Thammasat University, Bangkok 10200, Thailand)

  • Arnat Leemakdej

    (Department of Finance, Faculty of Commerce and Accountancy, Thammasat University, Bangkok 10200, Thailand)

Abstract

Previous studies have overlooked hidden ownership in their analysis, which could result in biased findings. This research utilizes unique data sources to uncover hidden ownership patterns and employs ordinary least square regression to investigate the relationship between hidden ownership and firm performance. The findings indicate that hidden ownership affects a firm’s performance, but not in the same manner as previously thought. Firms with hidden ownership actually perform better than those without. These results contradict the belief that hidden ownership leads to wealth expropriation from minority shareholders and negatively impacts a firm’s performance. The study also remains robust after accounting for potential endogeneity using an instrumental variable approach. The findings provide policy implications and contribute to the ownership and firm performance literatures.

Suggested Citation

  • Natthawut Wangwan & Arnat Leemakdej, 2023. "Hidden Ownership and Firm Performance: Evidence from Thailand’s Initial Public Offering Firms," IJFS, MDPI, vol. 11(3), pages 1-16, September.
    • Handle: RePEc:gam:jijfss:v:11:y:2023:i:3:p:107-:d:1232595
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    References listed on IDEAS

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    1. Torben Pedersen & Steen Thomsen, 2003. "Ownership Structure and Value of the Largest European Firms: The Importance of Owner Identity," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 7(1), pages 27-55, March.
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    4. Jensen, Michael C. & Meckling, William H., 1976. "Theory of the firm: Managerial behavior, agency costs and ownership structure," Journal of Financial Economics, Elsevier, vol. 3(4), pages 305-360, October.
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    Full references (including those not matched with items on IDEAS)

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