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Does Ownership Structure Influence Firm Value? Evidence from India

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  • Jayesh Kumar

    (Xavier Institute of Management)

Abstract

This paper examines the effect of ownership structure on the firm performance for an unbalanced panel of 2478 Indian corporate firms from 1994 to 2000. We examine the effect of interactions between corporate, foreign, institutional, and managerial ownership on firm performance. Using panel data framework, we show that a large fraction of cross- sectional variation, in firm performance can be explained by unobserved firm heterogeneity. We provide evidence that the shareholding by institutional investors and managers affect firm performance non- linearly, after controlling for observed firm characteristics and unobserved firm heterogeneity. We also find that the equity ownership by foreign and corporate shareholders do not influence firm performance. We find no evidence in favor of endogeneity of ownership structure.

Suggested Citation

  • Jayesh Kumar, 2004. "Does Ownership Structure Influence Firm Value? Evidence from India," Finance 0406008, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpfi:0406008
    Note: Type of Document - pdf; pages: 48
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    More about this item

    Keywords

    Corporate Governance; Ownership Structure; Firm performance; Panel Data; India.;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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