Firm Performance when Ownership is very Concentrated: Evidence from a Semiparametric Panel

TitleFirm Performance when Ownership is very Concentrated: Evidence from a Semiparametric Panel
Publication TypeWorking Paper
Year of Publication2015
AuthorsM. Hamadi, A. Heinen
Number2015_02
KeywordsFamily firms, Firm performance, Large shareholders, Ownership concentration, Semiparametric panel
Abstract

We consider the effect on performance of very large controlling shareholders, who are mostly organized in voting blocks and business groups, in a sample of Belgian listed firms from 1991 to 2006. Since the shape of the relation between ownership and firm value is a controversial issue in corporate finance, we use semiparametric local-linear kernel-based panel models. These models allow us not to impose a priori functional restrictions on the relation between ownership and performance. Our semiparametric analysis shows that the effect on performance varies depending on the size of ownership stakes and that there are departures from linearity.

Citation Key6474
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