THE RELATIONS BETWEEN OWNERSHIP STRUCTURE AND CORPORATE PERFORMANCE: EVIDENCE FROM BAHRAIN STOCK EXCHANGE

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Abstract

In this article we examine the relation between ownership structure and corporate performance; the sample of the study included 42 out of 48 companies (resembling 87.5% of the population) of all sectors in Bahrain Stock Exchange in five years from 2007-2011. Several dimensions of ownership structure were studied and two different measurements of performance were used (ROA and Tobin’s Q) to capture the different results from using each one of them and to assess the relevance of each measurement to performance and to justify the conflicting results found by previous studies. Another objective of this study was to explore the patterns of ownership structure found in Bahraini market. The results of the study revealed that institutional ownership is the most common pattern of ownership structure that exists in Bahraini market. The results of testing the effect of ownership structure on performance were conflicting as expected depending on the measurement of performance that was used. Several recommendations were given to investors depending on the results obtained from the study and several points were cleared out to be addressed by future studies.

Keywords: Ownership Structure, Ownership Concentration, Foreign Ownership, Institutional Ownership, Managerial Ownership, Company Performance

How to cite this paper: Khamis, R., Al-Ali, W., Hamdan, A. (2015). The relations between ownership structure and corporate performance: evidence from Bahrain stock exchange. Corporate Ownership & Control, 13(1), 97-114. https://doi.org/10.22495/cocv13i1p10