The International Evidence on Performance and Equity Ownership by Insiders, Blockholders, and Institutions
Old Dominion University
University of Groningen - Faculty of Economics and Business
Old Dominion University - College of Business & Public Administration
EFMA 2002 London Meetings
This paper examines the impact of equity ownership by insiders and the equity holdings of blockholders and institutions on firm performance. We examine these relationships using samples of firms from the U.S., the U.K., Germany, and Japan. Using piecewise linear regression, we find that insiders influence performance positively in all four countries. Our results suggest that insider ownership helps to align the interests of management with those of outside shareholders. We also do not find evidence that firm performance suffers as insiders own "large" amounts of stock. And finally, we do not observe an overall significant relationship between performance and equity ownership by blockholders or institutions.
Number of Pages in PDF File: 34
Keywords: Firm Performance, Ownership Structure, and Corporate Governance
JEL Classification: G32, G34
Date posted: June 16, 2002
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