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Disentangling the Performance and Entrenchment Effect of Family Shareholding: A Study of Indian Corporate Governance


  • Manoranjan Pattanayak

    (CRISIL Limited, New Delhi)


Using an econometric framework, we examine the nature of relation between Tobin's Q and family shareholding in India. While there is no obvious causality laid down by theoretical literature, empirical evidences show a wide range of findings. In the present work, by controlling for a host of factors, we document a non-linear relation between family share holding and firm value. In the literature, the issue of endogenous problem is highlighted in the context of ownership-performance relation. We address this concern via the instrumental variable regression method. Even though the curvilinear aspect of the relation between firm value and insider share remain intact in all of the specifications, our model statistics do not trace any endogenous problem in the data.

Suggested Citation

  • Manoranjan Pattanayak, 2009. "Disentangling the Performance and Entrenchment Effect of Family Shareholding: A Study of Indian Corporate Governance," Journal of Entrepreneurial Finance, Pepperdine University, Graziadio School of Business and Management, vol. 12(4), pages 105-128, Spring.
  • Handle: RePEc:pep:journl:v:12:y:2009:i:4:p:105-28

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    More about this item


    Corporate Governance ; Firm ; Firms ; Governance ; Shareholding ; Shares;

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M13 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - New Firms; Startups


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