There are varied assertions with regard to the relationship between ownership structure and firm performance. Studies show positive, negative as well as both positive and negative relationship at differing levels of equity holdings by managers. Majority findings argued about owner controlled firm„s performance being better than manager controlled ones, yet lacking statistical assertion for the same. This research work is empirically investigating the impact of ownership structure on corporate performance by analysing firms traded on Bombay Stock Exchange(BSE). Using data spanning the 2008–2013 fiscal years of 30 of India's largest manufacturers (30 companies listed on BSE SENSEX index), this research paper empirically evaluates the extent to which a firm's financial performance is influenced by its ownership structure. To do so, I have examined distinct categories of Indian shareholders: Market investors, Stable investors and inside investors. The findings of this study strongly indicate that the relationship between the equity stakes of a particular category of investor and a firm's financial performance are highly idiosyncratic. Such a result emphasizes the importance of making finely grained and contextually relevant distinctions when modeling and evaluating corporate governance relations.
Ownership Structure, Investment Behaviour, Financial Performance, Determinants and Measures of Financial Performance
