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Ownership Concentration, Corporate Governance and Firm Performance: Evidence from Pakistan


  • Attiya Y. Javid

    (Pakistan Institute of Development Economics, Islamabad.)

  • Robina Iqbal

    (Freelance Researcher)


The study investigates the determinants of ownership concentration, the effect of ownership concentration on the firm’s performance with the sample of sixty representativ e firms from different manufacturing sectors of the Pakistan’s economy during 2003 to 2008. The results suggest that firms where ownership is concentrated they do not adopt better governance practices and disclose less, however board composition has posit ive and significant role. The firm specific factors affect the concentration of ownership more, the more investment opportunities provides greater incentives for ownership concentration, however, size has opposite effect and leads to diverse ownership to get wider access to funds and share ownership. The results reveal that in Pakistan corporations have more concentration of ownership which is the response of weak legal environment. The concentration of ownership by top five block-holders seems to have positive effect on firms’ profitability and performance measures. The family, foreign and director ownership also has positive affect on firm performance, however firm performance is not effected by financial institutions’ ownership. The broad implication that emerges from this study is that ownership concentration is an endogenous response of poor legal protection of the investors and seems to have significant effect on firm performance. It requires implementation of corporate governance reforms at most at par with real sector and financial sector reforms.

Suggested Citation

  • Attiya Y. Javid & Robina Iqbal, 2008. "Ownership Concentration, Corporate Governance and Firm Performance: Evidence from Pakistan," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 47(4), pages 643-659.
  • Handle: RePEc:pid:journl:v:47:y:2008:i:4:p:643-659

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    Cited by:

    1. Attiya Y. Javid & Robina Iqbal, 2010. "Corporate Governance in Pakistan : Corporate Valuation, Ownership and Financing," Governance Working Papers 22830, East Asian Bureau of Economic Research.
    2. repec:pid:journl:v:58:y:2019:i:1:p:1-25 is not listed on IDEAS
    3. Muhammad Fayyaz Sheikh & Syed Zulfiqar Ali Shah, 2016. "Executive Compensation, Firm Performance And Corporate Governance In An Emerging Economy," Proceedings of Business and Management Conferences 4406477, International Institute of Social and Economic Sciences.
    4. Kashif Rashid & Seep Nadeem, 2014. "The Role of Ownership Concentration, its Types and Firm Performance: A Quantitative Study of Financial Sector in Pakistan," Oeconomics of Knowledge, Saphira Publishing House, vol. 6(2), pages 10-61, June.
    5. repec:eee:accfor:v:42:y:2018:i:4:p:281-292 is not listed on IDEAS
    6. I.G. Okafor & Ugwuegbe S. Ugochukwu & Hillary C. Ezeaku, 2016. "The Effect of Board Interest on the Dividend Policy of Nigerian Manufacturing Sector," International Journal of Academic Research in Business and Social Sciences, Human Resource Management Academic Research Society, International Journal of Academic Research in Business and Social Sciences, vol. 6(8), pages 100-115, August.
    7. repec:bec:imsber:v:9:y:2017:i:4:p:233-258 is not listed on IDEAS
    8. Kamran & Attaullah Shah, 2014. "The Impact of Corporate Governance and Ownership Structure on Earnings Management Practices: Evidence from Listed Companies in Pakistan," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 19(2), pages 27-70, July-Dec.
    9. repec:gam:jsusta:v:11:y:2019:i:1:p:248-:d:195308 is not listed on IDEAS
    10. Attiya Yasmin Javid & Qaisar Imad, 2012. "A Decomposition Analysis of Capital Structure: Evidence from Pakistan’s Manufacturing Sector," Lahore Journal of Economics, Department of Economics, The Lahore School of Economics, vol. 17(1), pages 1-31, Jan-June.
    11. repec:taf:applec:v:50:y:2018:i:18:p:2012-2027 is not listed on IDEAS
    12. repec:ibn:ibrjnl:v:11:y:2018:i:11:p:55-66 is not listed on IDEAS

    More about this item


    Ownership Concentration; Corporate Governance; Firm Performance; Panel Data;

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • F3 - International Economics - - International Finance


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