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Ownership and Control of Widely and Closely Held Firms in India

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  • Balakrishnan Kavya
  • Santhakumar Shijin

Abstract

The fundamental dichotomy between dispersed and focused ownership system has been a critical issue in the field of corporate governance. The concentrated ownership mainly controlled by families or state give more supremacy to firms over cash-flow rights. This study investigates the ownership structure of Indian corporates primarily vested in the hands of promoter and promoter groups. Using ordinary least square estimates, the study identifies the determinants of concentrated ownership structure. Further, the study attempts to provide evidence on the convergence of the controls in Indian firms, and thereby assess the wealth concentrated amidst few. The findings of the study reveal contrasting evidence against widely affirmed notion in finance literature by Berle and Means (1932) that widely held firm is the organizational framework of large enterprises. In contrast, our findings reveal that concentrated ownership holds large corporations. Moreover, in addition to the constituents such as firm size, the number of stock markets and geographic ownership also contribute towards a significant impact on concentrated ownership.

Suggested Citation

  • Balakrishnan Kavya & Santhakumar Shijin, 2017. "Ownership and Control of Widely and Closely Held Firms in India," Vision, , vol. 21(4), pages 449-460, December.
    • Handle: RePEc:sae:vision:v:21:y:2017:i:4:p:449-460
    DOI: 10.1177/0972262917738895
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    References listed on IDEAS

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