The Equity Ownership Structure of Thai Firms

Abstract

This paper examines the ownership structure of listed Thai firms. The data sample is based on 1996. As expected, the ownership structure is extremely concentrated. In 82.59 percent of the firms in the sample, the largest shareholders own at least 25 percent of the shares. According to Thai corporate law, a shareholder with this level of shareholding, is a firm's controlling shareholder. The controlling shareholders are mainly families. Foreign investors form the second largest group of controlling shareholders. Most of the controlling shareholders use a simple ownership pattern to control the firms. Only in 21.27 percent of the firms, the controlling shareholders employ pyramid structures, and cross-ownership structures to control the firms. The controlling shareholders do not just control the votes. In approximately 70 percent of the firms in the sample, the controlling shareholders are involved in the firms' management as top executives and directors.

Keywords: Ownership structure; Corporate governance; Agency costs; Thailand

JEL Classification: G32