Impact of ownership structure (concentration) on firm accounting based and market based performance: evidence from Iran

The paper compares the effect of ownership structure on firm accounting based and market based performance using a sample of Iranian manufacturing and trading companies. We use Ordinary Least Squares (OLS) methods to empirically test relationship between ownership structure and profitability. We examine ownership structure through ownership concentration, company accounting based performance with ROA & ROI indicators and market based performance with P/E index. We summarize the effects of ownership concentration on performance in terms of two hypotheses: 1. high concentrated ownership companies should have better accounting based performance. 2. There is a significant negative relationship between ownership structure and market based performance in manufacturing and trading firms. Controlling nation effects and some other indicators we find a positive effect of ownership concentration on accounting based performance (ROA&ROI), but a negative effect on market based performance.