Dissecting ownership dynamics: How promoter and institutional stakes shape firm risk and financial resilience

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Abstract

This study investigates how promoter and institutional ownership influence firm-specific risk — both market-based (stock return volatility) and fundamental (Altman Z-score) — using a decade-long panel of Indian listed firms (2014–2024). Unlike prior studies that analyze ownership types in isolation, this research offers a unified empirical model incorporating both risk measures. The key contribution of the paper is the simultaneous estimation of the effect of ownership structures on two complementary dimensions of firm risk. The findings reveal that institutional ownership significantly reduces volatility, while promoter holding shows no significant impact on risk. Larger firms are more financially stable. These insights are especially relevant for governance reforms and investor strategy in emerging markets.

Keywords: Ownership Structure, Institutional Investors, Promoter Holdings, Stock Return Volatility, Altman Z-Score, Corporate Governance

Authors’ individual contribution: The Author is responsible for all the contributions to the paper according to CRediT (Contributor Roles Taxonomy) standards.

Declaration of conflicting interests: The Author declares that there is no conflict of interest.

JEL Classification: C33, G15, G32, G34

Received: 03.10.2025
Revised: 11.11.2025; 24.11.2025
Accepted: 02.12.2025
Published online: 05.12.2025

How to cite this paper: Hariharan, S. V. (2025). Dissecting ownership dynamics: How promoter and institutional stakes shape firm risk and financial resilience. Corporate Ownership & Control, 22(4), 72–77. https://doi.org/10.22495/cocv22i4art6