THE STRUCTURE OF CORPORATE OWNERSHIP AND FIRM PERFORMANCE: SRI LANKAN EVIDENCE

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Abstract

This paper examines the impact of ownership structure and concentration on firm performance in Sri Lanka, an emerging market in Asia. The study estimates a series of regressions using pooled data for a sample of Sri Lankan-listed firms to investigate the impact of ownership concentration and structure on firm performance based on agency theory framework, using both accounting and market-based performance indicators. The results of the study provide evidence for a strong positive relationship between ownership concentration and accounting performance measures. This suggests that a greater concentration of ownership leads to better performance. However, we found no significant impact using market-based performance measures, which suggests the existence of numerous market inefficiencies and anomalies. Furthermore, the findings of the study show that ownership structure does not have a significant distinguishable effect on performance.

Keywords: Corporate Governance, Ownership Concentration, Performance, Emerging Markets, Sri Lanka

How to cite this paper: Manawaduge, A., & De Zoysa, A. (2013). The structure of corporate ownership and firm performance: Sri Lankan evidence. Corporate Ownership & Control, 11(1-8), 723-734. https://doi.org/10.22495/cocv11i1c8art3