When Control Matters: Ownership Concentration and Firm Performance in India

Purpose: The purpose of this paper is to investigate the impact of ownership concentration on firm performance of selected Indian Companies.

Design/Methodology/Approach: The study is based on secondary financial data of 38 Non-Financial companies obtained from ACE EQUITY database and the annual reports for the year 2020. This study uses correlation and regression analysis to arrive at the results.

Findings: The results of the study show that ownership concentration has a significant positive impact on market performance and positive but insignificant impact on operating and financial performance of selected Indian Non-financial firms.

Implications: The study implies that it is practical to have greater ownership concentration in emerging economies like India, to enhance firm value, but this at the same time requires firms to have adequate safeguards to protect the interest of minority shareholders to avoid Type II agency conflicts.