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Performance implication of ownership structure and ownership concentration: Evidence from Sri Lankan firms

Conference Paper


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Abstract


  • Purpose - This paper seeks to examine the impact of ownership concentration

    and ownership structure on firms’ performance of a sample of public listed

    companies in Sri Lanka in the premise of an agency theory framework.

    Design/methodology/approach - The paper first investigates the nature of

    ownership structure and concentration and then examines whether there is

    strong evidence to support the observation that the variations of ownership

    structure across firms result in systematic variations in firm performance. This

    hypothesis is tested by assessing the impact of ownership structure and

    concentration on firm performance measured in terms of accounting

    profitability and market performance using data for 45 Sri Lankan listed

    companies.

    Findings – The main finding indicates that there is a significant relationship

    between ownership concentration (SH10) and the performance of Sri Lankan

    companies measured in terms of an accounting performance measure of Return

    on Assets (ROA). However, no significant relationship was found between the

    Herfindahl index (HERF), which is a measure of ownership concentration, and

    any of the performance measures tested in the study. The insignificance of the

    HERF suggests that there could be a nonlinear relationship between ownership

    concentration and a firm’s performance. This study also did not find a

    relationship between market-based performance measures of companies and

    ownership concentration or the ownership structure of the Sri Lankan

    companies. This finding suggests the existence of market anomalies common

    to most of the emerging markets.

UOW Authors


  •   Manawaduge, Athula S. (external author)
  •   De Zoysa, Anura
  •   Rudkin, Kathy M. (external author)

Publication Date


  • 2009

Citation


  • Manawaduge, A. S., De Zoysa, A. & Rudkin, K. M. (2009). Performance implication of ownership structure and ownership concentration: Evidence from Sri Lankan firms. Performance Management Association Conference (pp. 1-12). Dunedin, New Zealand: Performance Measurement Association.

Ro Full-text Url


  • http://ro.uow.edu.au/cgi/viewcontent.cgi?article=3444&context=commpapers

Ro Metadata Url


  • http://ro.uow.edu.au/commpapers/2395

Start Page


  • 1

End Page


  • 12

Place Of Publication


  • http://www.pma.otago.ac.nz/

Abstract


  • Purpose - This paper seeks to examine the impact of ownership concentration

    and ownership structure on firms’ performance of a sample of public listed

    companies in Sri Lanka in the premise of an agency theory framework.

    Design/methodology/approach - The paper first investigates the nature of

    ownership structure and concentration and then examines whether there is

    strong evidence to support the observation that the variations of ownership

    structure across firms result in systematic variations in firm performance. This

    hypothesis is tested by assessing the impact of ownership structure and

    concentration on firm performance measured in terms of accounting

    profitability and market performance using data for 45 Sri Lankan listed

    companies.

    Findings – The main finding indicates that there is a significant relationship

    between ownership concentration (SH10) and the performance of Sri Lankan

    companies measured in terms of an accounting performance measure of Return

    on Assets (ROA). However, no significant relationship was found between the

    Herfindahl index (HERF), which is a measure of ownership concentration, and

    any of the performance measures tested in the study. The insignificance of the

    HERF suggests that there could be a nonlinear relationship between ownership

    concentration and a firm’s performance. This study also did not find a

    relationship between market-based performance measures of companies and

    ownership concentration or the ownership structure of the Sri Lankan

    companies. This finding suggests the existence of market anomalies common

    to most of the emerging markets.

UOW Authors


  •   Manawaduge, Athula S. (external author)
  •   De Zoysa, Anura
  •   Rudkin, Kathy M. (external author)

Publication Date


  • 2009

Citation


  • Manawaduge, A. S., De Zoysa, A. & Rudkin, K. M. (2009). Performance implication of ownership structure and ownership concentration: Evidence from Sri Lankan firms. Performance Management Association Conference (pp. 1-12). Dunedin, New Zealand: Performance Measurement Association.

Ro Full-text Url


  • http://ro.uow.edu.au/cgi/viewcontent.cgi?article=3444&context=commpapers

Ro Metadata Url


  • http://ro.uow.edu.au/commpapers/2395

Start Page


  • 1

End Page


  • 12

Place Of Publication


  • http://www.pma.otago.ac.nz/