Corporate Ownership Structure and Firm Performance: Evidence from Greek Firms

By Panayotis Kapopoulos, S. Lazaretou. Social Science Research Network, 2006

388 citations recorded by the source corpus.

The Berle-Means thesis (1932 "The Modern Corporation and Private Property". New York: Harcourt, Brace and World) implies that diffuse ownership adversely affects firm performance. This paper tries to investigate whether there is strong evidence to support the notion that variations across firms in observed ownership structures result in systematic variations in observed firm performance. We test this hypothesis by assessing the impact of the structure of ownership on corporate performance, measured by profitability, using data for 175 Greek listed firms. Following Demsetz and Villalonga (2001 Ownership Structure and Corporate Performance, "Journal of Corporate Finance", 7, 209-233), we model ownership structure, first, as an endogenous variable and, second, we consider two different measures of ownership structure reflecting different groups of shareholders with conflicting interests. Empirical findings suggest that a more concentrated ownership structure positively relates to higher firm profitability. We also find that higher firm profitability requires a less diffused ownership. Copyright (c) 2007 The Authors; Journal compilation (c) 2007 Blackwell Publishing Ltd.

Subfields: Accounting, Organizational Behavior and Human Resource Management

View Paper: https://www.semanticscholar.org/paper/1a9a555b6d578b2d28ad138fde214ee0ab287eed

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Citations in the corpus

Islamic Financial Institutions and Corporate Governance: New Insights for Agency Theory (2009, background): “Hu and Izumida (2008) and Kapopoulos and Lazaretou (2007) tackle the issue of ownership structures and their implications for the emergence of agency problems.”
Does corporate governance affect Australian banks' performance? (2016, background): “…to the performance of financial and non-financial corporations are mixed: positive effects of large shareholdings on performance were found by Earle et al. (2005), Destefanis and Sena (2007) and Kapopoulos and Lazaretou (2007), and a negative impact was found by Demsetz and Villalonga (2001).”
Ownership concentration and bank profitability (2017, neutral): “Leech and Leahy (1991) find a negative relationship between ownership concentration and profitability for large British companies implying that high ownership concentration has negative effects for profitability. Lehmann and Weigand (2000) investigate the impact of corporate governance on the perfor”
The Impact of Corporate Social Responsibility Disclosure on Financial Performance: Evidence from the GCC Islamic Banking Sector (2018, methodology): “The debt ratio, which is calculated as long-term debt divided by total assets, is used as a proxy for the riskiness of a bank (Waddock and Graves 1997; Kapopoulos and Lazaretou 2007; Barnett and Salomon 2012).”
Board Characteristics and Firm Performance: Evidence from New Zealand (2011, background): “…firms and executive compensation (Hallock, 1997; Geletkanyez, Boyd & Finkelstein, 2001), director ownership (Bhagat, Carey & Elson, 1999; Kapopoulos & Lazaretou, 2007), women on the boards (Burke, 1997; Singh & Vinnicombe, 2004; Huse & Solberg, 2006), performance assessment of board…”
The Measurements of Firm Performance's Dimensions (2014, methodology): “In addition, a high Q ratio shows success in the a way that the firm has leveraged its investment to develop the company that is valued more in terms of its market-value compared to its book-value (Kapopoulos & Lazaretou, 2007).”
The Examination of the Effect of Ownership Structure on Firm Performance in Listed Firms of Tehran Stock Exchange Based on the Type of the Industry (2011, background): “Kapopoulos and Lazaretou (2006), tried to investigate whether there is strong evidence to support the notion that variations across firms in observed ownership structure result in systematic variations in observed firm performance.”
Compliance and multidimensional firm performance: Evaluating the efficacy of rule-based code of corporate governance (2013, neutral): “The two other theories that have been used separately or with agency theories are; information asymmetry andmanagerial signaling theory (Kapopoulos and Lazaretou, 2007; Rhee and Lee, 2008) and convergence theory (Clarke, 2004a,b).”
The efficacy of principle‐based corporate governance practices and firm financial performance: An empirical investigation (2010, background): “Klein (2002) shows that independent audit committees reduce the likelihood of earnings management thus improving transparency.”