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Ownership structure, inside ownership and firm performance

Madiwe, J. (2014) Ownership structure, inside ownership and firm performance.

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Abstract:During the recent financial crisis, firms as well as investors were confronted with an extraordinary market situation. Given this context, this paper analyzes the effects of both ownership diffusion and inside ownership on firm performance. While the relationship between inside ownership and firm performance has been understood quite well by previous research, the study of a crisis period offers a unique opportunity to gain additional insights. Likewise, as research about the influence of ownership structure on firm performance and the underlying reasons have been inconclusive so far, a crisis period also offers a new opportunity to not only test if such relation exists, but also does it allow for conclusions about the underlying reasons. This paper analyzes 49 German, listed firms over the period from 2008 to 2011. In general, weak relations have been found, also after accounting for a time delay of effects. This paper therefore concludes that ownership structure is an endogenous variable that is not related to firm performance while a (weak) relationship between inside ownership and firm performance does exist, but inside ownership by the supervisory board is highly uncommon among German firms.
Item Type:Essay (Bachelor)
Faculty:BMS: Behavioural, Management and Social Sciences
Subject:85 business administration, organizational science
Programme:International Business Administration BSc (50952)
Link to this item:http://purl.utwente.nl/essays/65309
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