DEMYSTIFYING THE NEXUS BETWEEN OWNERSHIP STRUCTURE AND PERFORMANCE: A STUDY OF THE EMERGING MARKET

How to cite this paper: Debnath, P., Dey, B. K., Mazumdar, N., Das, S., & Gachuiwo, H. (2022). Demystifying the nexus between ownership structure and performance: A study of the emerging market [Special issue]. Corporate & Business Strategy


INTRODUCTION
The corporate governance (CG) mechanism has received considerable attention in the free enterprise economy across the globe. Due to its economic crisis and the collapse of many reputed and wellperforming corporate enterprises like Xerox, Enron, Satyam, and Kingfisher, many have questions about CG's role (Debnath, 2018). European countries and Asia, including India, have witnessed several corporate scams of large magnitude during the last two decades, which calls for robust corporate control. The CG describes a set of standards of practice for directing and controlling a company's and its stakeholders' activities (The Committee on the Financial Aspects of Corporate Governance, 1992) and balancing the interest of all stakeholders. It is a statutory necessity in a company that imposes a fiduciary responsibility on management to perform for all shareholders and stakeholders (Gulzar et al., 2020). In the absence of a CG mechanism, investors (Principal) are unable to monitor the business on one hand and managers find it expedient to abuse organizational resources, which run in conflict with the interest of shareholders and the firm's performance on the other hand (Gulzar et al., 2020). Studies show that investors have better confidence and a positive perception of a firm maintaining higher governance standards (Arora & Bodhanwala, 2018). There are several cases of promoters have taken actions that are favourable to them but detrimental to the interests of minority shareholders, which have affected the confidence of minority shareholders in India (Organisation for Economic Co-operation and Development [OECD] 1 , 2020). The agency cost arises from the separation of ownership from control of business matters, a prevalent problem in joint-stock companies (Berle & Means, 1932;Jensen & Meckling, 1976). Thus, the CG mechanism is a control mechanism that effectively protects, promotes, and promises the welfare of all stakeholders. Research studies (Fama, 1980;Fama & Jensen, 1983 Ownership structure (OS) is a crucial area of research and its upshot on corporate performance is a contentious issue in CG literature (Kumar & Zattoni, 2015). The OS refers to the distribution of equity shares among the shareholders. It comprises the ownership concentration, OC (the percentage of shares held by each shareholder), and owners' identity, OI (like individual promoters, public shareholders, foreign institutional owners, body corporate, etc.). Different shareholders have distinct economic reasons for investing and engaging in strategic decision-making, which substantially impacts corporate performance (Manna, Sahu, & Gupta, 2016). As a result, previous studies have established that the OS affects the company's operational efficiency, performance, and management to a great extent (Arora & Bodhanwala, 2018;Nashier & Gupta, 2020). The debate on the impact of OS on corporate performance started a long time ago with the pioneer works of Smith (1776) and Berle and Means (1932). Previous scholars have proved that OC has a significant impact on CG mechanism and corporate performance as shareholders with intense shareholding influence the operations and management of a company (Jensen & Meckling, 1976 & Gupta, 2020). Different studies have documented that OS in an emerging market like India is different from developed countries like the USA, the UK, Germany, and Japan (Sarkar & Sarkar, 2000). Family owners primarily conquer the OS in Indian corporate as promoters and promoter groups with high OC (Kavya & Shijin, 2017;Panda & Bag, 2019). The shareholdings of promoters in India have been relatively stable at around 50 percent from 2001 to 2018 (OECD, 2020). Therefore, determining the influence of OS on corporate performance in emerging economies such as India, which has become a popular destination for foreign institutional investors (FIIs), is crucial. FIIs are becoming more important players in the Indian capital market. Foreign institutional owners have a larger shareholding among institutional investors in Indian firms (Yadav, 2020). After the liberalization of the Indian economy in 1990, there has been a substantial transformation in investment by FIIs. The Securities and Exchange Board of India (SEBI) allowed FIIs to invest in India on 14 September 1992. After that, the OS in India form experienced many changes with higher investment by FIIs (Gupta, 2019). The recent report on the OS of listed companies in India (OECD, 2020) disclosed that the proportion of the overall institutional investment and shareholdings by FIIs increased from 11.3 percent in 2001 to 46 percent in 2014. Because of this scenario, it is imperative to undertake this study on the Indian corporate sector after applying the Companies Act, 2013.
This study investigated the association between OS and corporate performance in the Indian context and contributed to the present literature in several ways. First, this study provides empirical evidence from the BSE-500 listed FMCG sector for the first time after the implementation of the Companies Act, of 2013. Second, it is crucial to analyze the Indian market since the corporate ownership pattern in India is quite different from that in the developed markets (Kavya & Shijin, 2017; OECD, 2020). Thus, research in an emerging market like the Indian economic setup can have important insinuations for regulators, investors, policymakers, and other stakeholders. Third, previous studies revealed that the corporate OS in developing countries is quite different from that in developed markets (Nashier & Gupta, 2020). This study considered the Indian market to symbolize the emerging economy. A sizable number of leading companies in India is typically controlled and managed by family ownership with few shareholders in promoters and executive directors (Madhani, 2016;Kavya & Shijin, 2017). In Indian listed firms, promoters own around 50 percent of the total equity share capital (OECD, 2020), which is similar to other emerging Asian countries like Pakistan (Yassar & Al Mamun, 2017), Bangladesh (Khan, Muttakin, & Siddiqui, 2013) and Malaysia (Abdullah, Mohamad, & Mokhtar, 2011). The corporate scenario of the emerging economy is characterized by concentrated ownership in the hands of a few promoters, family control businesses, and the adoption of the western CG model where the economic environment is quite different. Therefore, the Indian market is the best representative of the growing economy for exploring the relationship between OS and corporate performance, which will contribute to the body of available literature.
Fourth, a novel contribution of this study is that it examined the role of OC by the Hirschman-Herfindahl index (HHI), which is mainly in a developed market economy. However, the HHI is rarely used in the emerging economy (except, Nashier and Gupta, 2020, in India, taking older data set before applying the Companies Act, 2013, and Yassar and Al Mamun, 2017, considered for Pakistani firms from much earlier time 2009 to 2013). Other emerging market studies have measured the OC by taking the percentage of shares held by the largest shareholders or promoter holding or institutional shareholding, foreign ownership, etc. Thus, this study considered this HHI to measure OC for this study as a different approach. Fifth, the present study considered the FMCG sector firm for the analysis. In the literature survey based on the Indian economy, it is found that no research has addressed this sector to assess the nexus between OS and corporate performance. Therefore, the analysis of the FMCG sector is vital in the Indian market for multiple reasons from the viewpoint of regulators, policymakers, global investors, and analysts. Firstly, the FMCG sector contributes to India's gross domestic product (GDP) growth (Patil, 2016). Presently, the FMCG industry is treated as the fourth largest sector in the Indian economy and employs around 3 million people. Moreover, the industry witnessed a healthy foreign direct investment (FDI) inflow of US$16.28 billion from April 2000 to March 2020. Therefore, the Government of India has allowed 100 percent FDI opportunities in food processing and singlebrand retail and 51 percent in multi-brand retail (India Brand Equity Foundation [IBEF] 2 , 2022), and studies reported the positive integration between FDI and economic development (Shahani & Aayushi, 2019). The findings of this study are important for international readers because many studies have been conducted to explore the relationship between OS and firm performance based on developed economic conditions but a very limited number of empirical evidence is available from emerging economies. This study provided evidence that the association between ownership structure and firm performance is almost similar to developed countries' corporate scenarios. Therefore, this study will bridge the existing gap in the literature producing empirical findings from the Indian 2 India Brand Equity Foundation (IBEF) is a trust established by the Department of Commerce, Ministry of Commerce and Industry. The government of India's primary objective is to promote and create international awareness of the Made in India label in the market overseas and facilitate discrimination of knowledge of Indian products and services. context which will be crucial input to international investors before taking an investment decision in the Indian corporate sector. Findings are also important for policymakers and regulators for framing the investors' friendly foreign investment policy to protect their interest ensuring a smooth flow of required foreign capital in the country and profitability.
A review of contemporary studies revealed no unanimity on the relationship between OS and corporate performance. While investigating the relationship between OS and corporate performance, some studies (  To determine the effect of OC on the marketbased performance of Indian FMCG companies.
 To estimate the impact of OI on the accounting performance of FMCG sector firms in India.
 To examine the influence of OI on the marketbased performance of Indian FMCG companies.
As per the literature survey, no studies on the nexus between OS and corporate performance in the Indian context after the Companies Act, 2013, have been conducted. Therefore, this study will enrich the body of contemporary studies on CG in emerging markets in general and India in particular.
The following is the order in which the article is organized. Section 1 provides an overview and background of the study. Section 2 presents empirical research investigating the relationship between ownership structure and corporate performance, whereas Section 3 addresses the data and methodology. Section 4 presents the data analysis and discussion. Finally, Section 5 provides concluding observations, limitations, and research scope for the future. Promoters and non-promoters characterize the OS in Indian companies. In principle, promoters are groups of individuals or institutions responsible for establishing the company or controlling shareholders, while non-promoters refer to other shareholders, including minority shareholders. Like other emerging markets, promoters and promoter groups have steadily owned almost half of the shares in Indian listed firms for the last two decades (OECD, 2020). The OECD report further revealed that among the promoter category, individual promoters are the dominant group for all listed companies in India, whose shareholding proportion varied from 48 percent and 53 percent since 2006 (OECD, 2020). The OC is a prominent investor strategy for ensuring a fair yield on their investment (Shleifer & Vishny, 1997). Previous studies believe that OC also has significant repercussions on corporate performance (Altaf & Shah, 2018). Although this problem has acquired much attention in theories and empirical studies, there is no consensus on the direction of the effect. According to Jensen and Meckling (1976), OC can reduce the conflict of interest between owners and managers and strong corporate performance.

LITERATURE REVIEW
It could have been linked to agency conflicts, leading to minority shareholder deprivation and poor corporate performance. Katragadda and Sreeram (2018) reported that insider shareholding is positively and significantly related to corporate performance. The study of Haque and Shahid (2016) observed that foreign ownership negatively impacts corporate performance, but OC has no effect. Desoky and Mousa (2013) reported that OC and owner's identity are significant determents of the performance of Egyptian listed companies. At the same time, Alipour (2013) documented that the diffused OS promotes the profitability of Tehran Stock Exchange (TSE) listed firms. However, Al-Saidi and Al-Shammari (2015) encountered a negative association between OC and corporate performance in Kuwaiti firms. However, they have noted that individual ownership has significant implications on performance. Ben Slama Zouari and Boulila Taktak (2014) found that OC and performance are unresponsive to each other in banking companies.
While many previous studies have focused on agency relationships and the impact of CG on corporate performance, this study aims to estimate the effects of OS on corporate performance in an emerging economy like India, where it is yet to draw much attention in the academic literature. The identity of shareholders and OC reflects the power of a group of owners who can influence managerial decisions. Dwivedi  shareholding and corporate performance. Similarly, Roy (2016a, 2016b) and Sandhya and Parashar (2019) have also advocated in favour of constructive connotation between CG and corporate performance in India. Bhatia and Srivastava (2017) encountered the nonlinear relationship between promoters' shareholding and the performance of the firms in the Indian economic setup. They find evidence of the endogenous relationship between promoters' shareholding and corporate performance. The study of Nazir and Malhotra (2016) acknowledged that shareholding by non-promoters groups positively impacts firm profitability in India. Yasser and Al Mamun (2017) figured out a significant positive association between OS, market-based performance measures, and economic profit. They also observed that institutional shareholding and foreign shareholding are positively associated with corporate performance. The study of Kumar and Singh (2013) and Mishra and Kapil (2017) documented a significant positive association between promoter ownership and corporate performance. Rao, Parameshwar, Ajay, and Aradhyula (2018) revealed a meaningful positive relationship between promoter shareholding and firm value.
Chatterjee and Bhattacharjee (2020) observed that OC has a favourable implication on the performance of Indian technology small and medium-sized enterprises (SMEs). The nexus between ownership structure and corporate performance has engrossed considerable attention, particularly in developing markets, yet empirical results remain diverse and inconclusive. Some studies (Yasser & Al Mamun, 2017; Iwasaki & Mizobata, 2019; Nashier & Gupta, 2020) claim that OC can increase performance and makes owners increasingly inclined or capable of managing agents. While Demsetz and Lehn (1985) and Demsetz and Villalonga (2001) have documented that corporate performance is not dependent on OC and OS, respectively. However, others have argued that market oversight will control the managers in the presence of efficient markets (Kuznetsov & Muravyev, 2000).
The central contradiction between diffused and focused ownership systems has been a critical issue in CG literature worldwide. Ganguli (2019) and Singla (2020) noted that family ownership positively influences profitability, and Sahasranamam, Arya, and Sud (2020) viewed that business group ownership and family ownership make the firm more socially responsible than others in the Indian context. Earlier studies (Desoky & Mousa, 2013) have revealed that ownership identity (OI) significantly influences the firms' decision-making process and performance. Studies have also reported that promoters' shareholding can positively impact corporate performance (Bhatia & Srivastava, 2017). Institutional ownership has a favourable association with corporate performance, according to Thomsen and Pedersen (2000), because it promotes external supervision of the firms. In addition, institutional ownership lowers the chance of bankruptcy (Carrillo & Bathala, 2010).
The dividend policy is a significant financial decision of a firm directly linked to the interest of shareholders. A recent study by Kiran and Ramesh (2021) noted that the holding of shares by institutional investors and promoter groups negatively influences dividend distribution. Madhani (2016) also found that promoters' shareholding has a negative effect on corporate performance in India. Aluchna

Data source
The present study is empirical research based on secondary data. Related data have been collected manually through a content analysis approach from the annual reports published by the respective companies to accomplish the set objectives. In addition, for the extraction of accounting and other company-specific data, the researchers have explored the CapitalinePlus Database, which is administered and offered by Capital Market Publishers Pvt. Ltd, Mumbai.

Corporate performance variables
The primary objective of this research is to quantify the influence of OC and OI on corporate performance in FMCG-listed companies in India, an emerging market. Therefore, keeping the objective into consideration, two different variables such as ROCE (

Explanatory variables
Twelve predictor variables are grouped into two categories apart from the dependent variables. The first category comprises six variables related to OC as follows: 1) the largest shareholder, 2) the two largest shareholders, 3) the three largest shareholders, 4) the four largest shareholders; 5) the five largest shareholders (the measurement of these five variables follows Yasser and Al Mamun, 2017), and 6) the Hirschman-Herfindahl index, HHI (

Control variables
To adjust to economic and firm-specific effects having significant implications on the firm's performance in the empirical analysis, the researchers have used some firm-specific variables to control corporate performance. Following some contemporary studies ( The present study considered the natural logarithm of the total number of years from the year of incorporation to represent firm age (Meah & Chaudhory, 2019). Size is another significant firmspecific factor that has an insinuation on the overall performance of any organization using the benefits of economies of scale. Therefore, the natural logarithm of total assets is taken as a proxy for firm size (Panda & Bag, 2019; Nashier & Gupta, 2020). Leverage, represented by the debt-equity ratio (DER), is included as the control variable because it indicates the debt-capital ratio compared to equity to finance the total assets (Singh & Bagga, 2019; Gulzar et al., 2020). As debt capital is cheaper than equity, higher leverage produces higher profit at higher risk. Assets turnover (ATO) indicates how effectively the firm is using its total assets to generate revenues. Thus, as per accounting literature, a higher turnover ratio leads to better performance (Welch, 2003). This study measured the liquidity by the current ratio, i.e., current assets to current liabilities, which symbolizes the shortterm solvency of the firm. Thus, a solvent firm has higher liquidity, resulting in profitability (Alipour, 2013; Singh & Bagga, 2019; Nashier & Gupta, 2020). Table 1 presents the summary of variables under consideration in the current study.

Table 1. Summary of variables and estimation
Note: * As recommended by Demsetz and Lehn (1985) and following the study of Nashier and Gupta (2020), the present study has calculated the HHI as the natural logarithm of square of % of shareholding by Indian individuals promoter + square of % shareholding by corporate body promoters + square of % shareholding by Indian promoter + square of % shareholding by foreign promoters + square of % of public institutional shareholding + square of % non-institutional public shareholding. Source: Authors' elaboration.

Econometric model specification
The regression model has been separated into two dimensions in light of the set objectives. In the first part, this study estimates the impact of OC on corporate performance (both accounting and market-based performance) by framing the following panel regression model. In Model 1, it is assumed that corporate performance (both market and accounting-based measures) is a function of OC (see Table 1).

Model 1
(1) where, i denotes individual sample firm, t represents the time period from FY 2015-2016 to FY 2019-2020. The and parameters capture the potential impacts of independent and control variables, respectively; is the error term.
In the second part, the present study estimates the effect of OI or ownership types on corporate performance (accounting and market-based performance) by assessing the following panel data regression model. In Model 2, it is assumed that corporate performance (both market and accountingbased measures) is a function of OI (see Table 1).

Model 2
(3) (4) where, i denotes individual sample firm, t represents the time period from FY 2015-2016 to FY 2019-2020. The and parameters capture the potential impacts of independent and control variables respectively; is the error term.
Panel data is better than time-series and crosssection data to analyze historical data in CG and financial literature because it allows for studying cross-sectional variations and time-series variations in the dataset. It helps to assess the sample's time and individual or group effects. The panel model also controls the dataset's undetected diverse characteristics (heterogeneity) (Wooldridge, 2005). Hence, the study considered a panel dataset comprised of 57 selected companies for five years (2016-2020), making 285 firm-year observations to estimate the impact of OC and OI on a firm's accounting and market-based performance. Further, to check the appropriateness of the regression model, we administered F-test (Baltagi, 1995) to compare the fitness between pooled ordinary least squares (OLS) and fixed effect (FE) model and the Lagrange multiplier (LM) test (Breusch & Pagan, 1980) to choose between pooled OLS and random effect (RE) models. At last, the study applied the Hausman test (Hausman, 1978) to check the aptness between RE and FE models.

DATA ANALYSIS
The present section reports the analysis of data and findings of the study. Findings are reported according to objectives and research questions.

Descriptive statistics
This subsection presented summary statistics of all dependent, independent, and control variables used to estimate the effect of OC and OI on corporate performance.   Apart from Table 2, the mean value of variables of interest is arranged on yearly basis for five years under consideration in Table 3 to present the companies' profitability and OS after the application of the Companies Act, 2013.
In Table 3, it can be seen that the mean value of MCap of the company shows a sharp rise after the Companies Act, 2013, but ROCE shows a mixed growth trend. Thus it can be concluded that the market-based performance of the company is more influenced by the Companies Act, 2013 than accounting performance. Concerning OC in the hands of the five largest shareholders (other than directors, promoters, and holders of Global Depositary Receipts, GDRs and American Depositary Receipts, ADRs), it shows balanced and upward movements after 2016. However, the concentration level measured by standard proxy of the HHI (the comprehensive measure of the OC index applied across the globe) witnessed a sharp decline after 2016. As far as OI is concerned, the proportion of shares held by PO, IPO, and BCO has steadily decreased in total equity since the Companies Act was enacted in 2013. PSH and IO, on the other hand, have seen a considerable increase in total proportion, whereas FPO has shown mixed growth since 2016.   Table 4 shows the correlation coefficient of the variables under consideration. The maximum value of the correlation coefficient is 0.66 between MCap and FS, which is acceptable as they are dependent and control variables, respectively and the value is far less than the maximum threshold limit of 0.80. Therefore, it is evident that the independent variables under consideration are not strongly correlated. Hence, the collinearity issue does not arise in the regression models (Gujarati, 2009). In addition to a low correlation coefficient of variables, lower VIF values (less than 10) corresponding to independent and control variables ensure the absence of multicollinearity in the present dataset.

Panel regression model
The findings of panel regression analysis are presented in this subsection. To analyze the impact of OC and OI on corporate performance, two distinct models are presented.
In two distinct equations, Table 5 shows the regression outcomes used to assess the relationship between OC and the profitability of the company in terms of market capitalization and return on capital employed, respectively. The study has used Breusch-Pagan LM test to determine the feasibility of the RE model and the pooled OLS model in the regression. The test shows that the t-statistic value is significant at 1 percent (t-statistic = 24.78, p-value = 0.0000). As a result, the pooled OLS model outperformed the RE (pooled OLS) model. According to the Hausman test result reported in Table 5, the FE model appears to be more appropriate than the RE model for both panels. Table 5 shows that the OC in the hands first five largest shareholders (OC1, OC2, OC3, OC4, and OC5) seemed to have no statistically significant impact on the accounting and market-based performance of the selected companies during the study period. Thus holding by large shareholders does not have any impact on corporate performance. Therefore, the current finding validates the findings of Panda and Bag (2019) when it relates to the linkage between OC and accounting performance. However, using the HHI, it is observed that OC has a strongly favourable effect on a firm's accounting and market-based performance, which is consistent with the findings of Yasser and Al Mamun (2017) in Pakistan, Nashier and Gupta (2020) in India, and Nguyen, Locke, and Reddy (2015) in Vietnam.    IO, BCO, and FPO) has a statistically significant (at a 1 percent level) positive impact on the marketbased performance of the firms under consideration. Nevertheless, at the same time, the present findings challenged the findings of Varghese and Sasidharan (2020), who found that institutional ownership discourages the firm's financial performance. However, PO and PSH negatively impact marketbased performance. This finding is similar to Dwivedi and Jain (2005), who observed a significant negative association between corporate performance and public shareholding. Therefore, this finding contradicts the findings of Ganguli and Agrawal (2009), Kumar and Singh (2013), and Chatterjee and Bhattacharjee (2020). This result implies that promoter shareholders may be unfavourable for the corporate performance as their objectives clash with small shareholders (Desoky & Mousa, 2013).
When the accounting performance as a variable of interest is considered, it is observed that the coefficient of FPO proportion and BCO has a significant affirmative impact on corporate performance at a 1 percent and 10 percent significant levels, respectively. However, other ownership identity variables (PO, IPO, IO, and PSH) do not significantly impact profitability.
So far, the regression model has identified control variables to estimate the control of OI on corporate performance; it is evident that FS, LIQ, DER, and ATO have a statistically significant effect on corporate performance. On the other hand, FS and LIQ positively affect the firm's market-based and accounting performance. The leverage encourages market-based performance but does not affect accounting performance. The study also finds that ATO has a positive impact on accounting performance but a negative on market-based performance. Finally, it is observed that corporate performance is indifferent from FA.
The effect of OI on corporate performance (market and accounting measure) is presented in Table 6.

DISCUSSION
This section discusses the implication of the findings reported in the previous data analysis section.
From the descriptive analysis, it is observed that the ownership structure in the selected firms under consideration in the present study has more concentrated ownership compared to the findings of the OECD (2020). That means a small number of shareholders are controlling the higher proportion of the shareholding portfolio in the organization. Table 2 also reported that institutional ownership (IO), individual promoter ownership (IPO), body corporate ownership (BCO), and foreign promoter ownership (FPO) are also considerably less in the Indian corporate shareholding pattern.
From the trend analysis, it is observed that there has been a mismatch in the growth pattern for the last couple of years between market capitalisation and profitability among the firms under consideration. So far ownership structure (OS) is concerned it has been observed that some variables of ownership have declined sharply while others have shown ups and down. Therefore, the analysis failed to reveal any particular trend of growth during the period under consideration.
In view of a positive significant relationship between the HHI and profitability measures in terms of return on capital employed and market capitalisation the present findings supported the alternative hypotheses H1 and H2 where it is presumed that ownership concentration (OC) has a significant relationship with accounting-based performance and market-based performance, respectively. Considering the positive relationship between the owners' identity (OI) variables with market-based performance this study backed the finding of many worth noting previous findings across different country (Sharma & Singh, 2018; Panda & Leepsa, 2019). Therefore, findings supported the alternative hypothesis H3 which assumed that market-based corporate performance is linked with OI in the OS. Similarly, in view of a positive association between accounting-based performance and owners' identity variables under consideration, this study also upholds the fourth alternative hypothesis H4.

CONCLUSION
The previous empirical research on the impact of OS on corporate performance has produced mixed results in developed market setups and limited numbers in emerging markets, particularly in India. Given the limited and inconclusive findings, this study examines the impact of OS (OC and OI) on FMCG sector firms' performance following the Companies Act, 2013 in India's CG framework.
The study observes the OC to a large extent and the five largest shareholders control roughly 16.24 percent of total equity capital, and a consistent increase in the holding proportion over the years after implementing the Companies Act, 2013, whilst the HHI is on the decline. Other recent research in emerging markets such as Pakistan In the FMCG sector, it is also observed that 58 percent of total equity capital and 42 percent of shareholding go to non-promoters shareholders. As a result, compared to the average shareholding of all Indian listed companies, the OS in the FMCG sector is more concentrated in the hands of promoters. However, year-wise, statistics exposed that promoters' ownership proportion has declined while public ownership has gone up after the application of the Companies Act, 2013. From the regression analysis, the study finds that, in line with other contemporary studies, OC (measured by the HHI) has a significant positive impact on the accounting and market-based performance of the selected firms, which is similar to the contemporary studies (Nashier & Gupta, 2020). However, the present study finds no association between OC in the hands of the five largest shareholders and performance. In the second model, the study finds that some OI variables such as IPO, IO, BCO, and FPO positively impact performance. However, promoter ownership and public shareholding have a negative impact. This finding challenges Mishra and Kapil (2017) and Varghese and Sasidharan (2020), who reported a positive affiliation concerning promoter ownership and corporate performance. The analysis revealed that OS had a more significant effect on market-based performance than accounting-based performance during the study period.
As this is the only study in India after the Companies Act, 2013, the result would undoubtedly enrich the present body of CG studies in the emergent markets. The present study results draw the attention of shareholders, policymakers, creditors, and other investors to know the prominence of OS to influence the accounting and market-based performance of the corporate organization in an emerging market like India. This study will benefit the market regulators, policymakers, investors, and researchers by giving better insight into the OS of Indian FMCG sector companies in the post-application of the Companies Act, 2013. The outcome of this study presents a better amplification of the impact of OC and OI on corporate performance in FMCG companies working in the Indian market in the Companies Act, 2013 era.
Nevertheless, there are some drawbacks to this study. In this study, the BSE-listed FMCG sector firms are included for five years, from FY 2015-2016 to FY 2019-2020, i.e., after adopting the Companies Act, 2013. Therefore, the current findings may not generalize to diverse trade and economic contexts. This constraint may serve as a source of inspiration for future scholars.
However, despite several novel contributions of the present study, it would also be interesting for the researchers to conduct studies in other countries with similar economic development levels to crosscheck the findings. Researchers can also consider multicounty corporate datasets to compare the impact of OS on firm performance across different countries. The researcher can look at multiple industries over a more extended period before the Companies Act, 2013, allowing for intersector comparisons and the impact of the Companies Act, 2013 on OS and corporate performance. Thus, future studies can use qualitative data such as directors' financial knowledge as CG variables.