Determinants of Ownership Concentration: The Importance of Firm-, Industry- and Country-Level Factors

Posted: 17 May 2010

See all articles by Christian Weiss

Christian Weiss

EBS Universität für Wirtschaft und Recht - EBS Business School - Department of Strategy, Organization & Leadership

Ansgar Richter

University of Liverpool - Management School (ULMS)

Date Written: February 1, 2010

Abstract

We analyze the relative importance of firm-, industry-, and country-level factors as determinants of the level of ownership concentration of firms. Building particularly on the work of Demsetz & Lehn (1985), Thomsen & Pedersen (1999; 1997, 1998), and La Porta et al.(1998, 1999), we develop hypotheses and test them on a sample of 900 firms from nine countries, using hierarchical linear models. Our models explain up to 31% of the variance in the ownership concentration of firms. The results show that the firm- and the country-level influence ownership concentration significantly, whereas industry-level factors play an almost negligible role in this respect. Specifically, we find that the institutional context in which companies operate has a surprisingly large effect on the level of ownership concentration. Our results should spark further multi-level research on the relationship between environmental factors on the country level and the allocation of ownership rights in firms.

Keywords: Ownership concentration, determinants, corporate governance, HLM

JEL Classification: G32, L20

Suggested Citation

Weiss, Christian and Richter, Ansgar, Determinants of Ownership Concentration: The Importance of Firm-, Industry- and Country-Level Factors (February 1, 2010). European Business School Research Paper No. 10-05. Available at SSRN: https://ssrn.com/abstract=1562641 or http://dx.doi.org/10.2139/ssrn.1562641

Christian Weiss (Contact Author)

EBS Universität für Wirtschaft und Recht - EBS Business School - Department of Strategy, Organization & Leadership ( email )

Campus Wiesbaden
Soehnleinstr. 8 D
Wiesbaden, 65201
Germany

Ansgar Richter

University of Liverpool - Management School (ULMS) ( email )

Chatham Street
Liverpool, L69 7ZH
United Kingdom
44 [0]151 795 3713 (Phone)
44 [0]151 795 3001 (Fax)

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