Corporate Ownership Structure and Firm Performance: Evidence from Listed Firms in Iran

Abstract

Corporate governance as a mechanism helps to align management's goals with those of the stakeholders which are to increase firm performance. The relevant literature suggests that ownership structure is one of the main corporate governance mechanisms influencing the scope of a firm performance. Therefore, the aim of this study is to answer this question: ''is there any relationship between ownership concentration and firm performance?'' Based on stratified random sampling of listed firms on Tehran Stock Exchange and applying the panel least squared with cross-section weights as the underlying statistical test, it is found that firm performance is negatively related to ownership concentration of Iranian listed firms. In addition, the impact of ownership structure on firm performance depends on industry.

Keywords: corporate governance, ownership concentration, firm performance

JEL Classification: G34