The International Evidence on Performance and Equity Ownership by Insiders, Blockholders, and Institutions
34 Pages Posted: 16 Jun 2002
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: Suggested Citation