Controlling Shareholders and Corporate Value: Evidence from Thailand

Posted: 3 Aug 2001

See all articles by Yupana Wiwattanakantang

Yupana Wiwattanakantang

National University of Singapore - Department of Finance


This study investigates the effects of controlling shareholders on corporate performance. The empirical results, based on a unique database of Thai firms, do not support the hypothesis that controlling shareholders expropriate corporate assets. In fact, the presence of controlling shareholders is associated with higher performance, when measured by accounting measures such as the ROA and the sales-asset ratio. Since most of the firms do not implement control mechanisms to separate voting and cash flow rights, the controlling shareholders might be self-constrained not to extract private benefits. Otherwise, they would internalize higher costs of expropriation from holding high stakes. The controlling shareholders' involvement in the management, however, has a negative effect on the performance. The negative effect is more pronounced when the controlling shareholder-and-manager's ownership is at the 25-50 percent. The evidence also reveals that family controlled firms display significantly higher performance. Foreign controlled firms as well as firms with more than one controlling shareholder also have higher ROA, relative to firms with no controlling shareholder.

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

JEL Classification: G30, G32, G34

Suggested Citation

Wiwattanakantang, Yupana, Controlling Shareholders and Corporate Value: Evidence from Thailand. Available at SSRN:

Yupana Wiwattanakantang (Contact Author)

National University of Singapore - Department of Finance ( email )

Business School
Mochtar Riady Building #7-44, 15 Kent Ridge Dri
Singapore, 117592
65-6516-1912 (Phone)

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