The International Evidence on Performance and Equity Ownership by Insiders, Blockholders, and Institutions

34 Pages Posted: 16 Jun 2002  

Bruce Seifert

Old Dominion University

Halit Gonenc

University of Groningen - Faculty of Economics and Business

Jim Wright

Old Dominion University - College of Business & Public Administration

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Abstract

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.

Keywords: Firm Performance, Ownership Structure, and Corporate Governance

JEL Classification: G32, G34

Suggested Citation

Seifert, Bruce and Gonenc, Halit and Wright, Jim, The International Evidence on Performance and Equity Ownership by Insiders, Blockholders, and Institutions. EFMA 2002 London Meetings. Available at SSRN: https://ssrn.com/abstract=314276 or http://dx.doi.org/10.2139/ssrn.314276

Bruce Seifert (Contact Author)

Old Dominion University ( email )

Department of Business Administration
Norfolk, VA 23529
United States
757-683-3552 (Phone)
757-683-5639 (Fax)

Halit Gonenc

University of Groningen - Faculty of Economics and Business ( email )

P.O. Box 100
Groningen, 9700 AV
Netherlands
+31 0 50 363 4237 (Phone)
+31 0 50 363 3850 (Fax)

Jim Wright

Old Dominion University - College of Business & Public Administration

Norfolk, VA 23529-0221
United States

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