Investigating the Role of Large Ownership on Firm Performance

This study examines the effect of large owners’ identity and shareholding concentration on firm performance. The large owners examined in this study are classified as individuals, institutions, corporates, government, and others. The study uses a balanced panel dataset of non-financial firms listed on the National Stock Exchange (NSE) of India. It comprises 1072 listed firms from 2010 to 2022. The analysis uses the fixed effects method with cluster robust standard errors. The empirical findings indicate varying effects of ownership identities on firm performance. Further, the effect of ownership identity on accounting and market performance differs when considering their respective shareholding concentration. However, the study indicates that when corporates hold the largest ownership, firms report significantly better accounting and market performance than the rest of the ownership identities. The performance of the firms where corporates hold the largest stake tends to increase with a rise in shareholding by the corporate owners.