The impact of Ownership Structure on Firm Performance: A Comparative Multi-Country Analysis

This thesis examines the impacts of five ownership structure types, namely family ownership, government ownership, institutional ownership, managerial ownership, and employee ownership, on firm performance building on agency theory in a multi-country context. It also studies the extent to which the nature of the relationship between different ownership structures and firm performance is affected by investor protection level, degree of capitalism, and industry average performance. The study uses data of 1511 firms from 20 countries over the period 2011-2020. The dynamic GMM is used to test the study hypotheses. The thesis results suggest that institutional ownership has a significant positive impact on firm performance in developed countries, especially in developed countries with higher investor protection levels or higher degrees of capitalism. Government and employee ownership have significant positive relationships with firm performance in developing countries. Government ownership is more significant in developing countries with lower investor protection levels or lower degrees of capitalism, while employee ownership is more significant in developing countries with higher investor protection levels or higher degrees of capitalism. Family ownership has more significant positive relationship with firm performance in countries with higher investor protection levels or lower degrees of capitalism, and in highly performing industries. Managerial ownership has more significant positive impact on firm performance in developing countries with lower investor protection levels or lower degrees of capitalism, and in industries with lower average performance. The study extends agency theory boundaries by suggesting that the various settings in which the firm operates significantly impact the effectiveness of different ownership structures in solving the agency problem and improving firm performance. The study contributes to literature by explaining the inconclusive results on the relationship between ownership structure and firm performance through considering the impacts of three moderating variables and by using data from both developed and developing countries. The thesis contributes to practice by providing recommendations to investors, board of directors, executive managers, and policy makers.