Promoter ownership, institutional ownership, and firm performance

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Abstract

The study aims to examine the relationship between ownership structure and firm performance. We have analyzed the data of 113 firms with 565 observations from 2013 to 2017 using the fixed panel data estimation approach. A subsample analysis has been employed by dividing the data based on firm size, board size, and firm age to test the robustness of the analysis. Results indicate a positive impact of domestic promoters, foreign promoters, and institutional shareholders on firm performance, whereas non-institutional shareholders bear an inverse relationship with performance. It has implications for regulators and policymakers responsible for formulating ownership structure policies in light of ongoing regulatory reforms.

Keywords: Corporate Governance, Firm Performance, Foreign Promoters, Institutional Shareholders, Ownership Structure, Promoter

Authors’ individual contribution: Conceptualization — M.S., K.B.L.S., and N.G.; Methodology — M.S., K.B.L.S., and N.G.; Validation — M.S., K.B.L.S., and N.G.; Formal Analysis — M.S., S.K.M., and P.B.; Investigation — M.S., P.B., and T.A.; Resources — M.S., K.B.L.S., and N.G.; Data Curation — M.S., K.B.L.S., N.G., S.K.M., P.B., and T.A.; Writing — Original Draft — M.S., K.B.L.S., and N.G.; Writing — Review & Editing — M.S., S.K.M., and T.A.; Supervision — M.S., K.B.L.S., and N.G.

Declaration of conflicting interests: The Authors declare that there is no conflict of interest.

JEL Classification: C33, G34, G23

Received: 25.08.2022
Accepted: 21.12.2022
Published online: 23.12.2022

How to cite this paper: Sahoo, M., Srivastava, K. B. L., Gupta, N., Mittal, S. K., Bakhshi, P., & Agarwal, T. (2022). Promoter ownership, institutional ownership, and firm performance. Corporate Ownership & Control, 20(1), 162–175. https://doi.org/10.22495/cocv20i1art15