Ownership Concentration and its Effects on Firm Performance: A Study of the Finnish Corporate Sector
Dorscht, Felix (2023)
2023
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Julkaisun pysyvä osoite on
https://urn.fi/URN:NBN:fi:amk-2023103128252
https://urn.fi/URN:NBN:fi:amk-2023103128252
Tiivistelmä
Since Berle and Means (1932) ownership structure and ownership concentration are viewed as an important influence on firm performance. It also has close linkages to the agency theory which is an immensely important financial principle. Empirical evidence on the topic is controversial with different researchers finding positive, negative, or no effects of ownership concentration on firm performance. Despite Finland having interesting characteristics as a case country, evidence from Finland is rare. What makes Finland stand out as a case country are its Nordic corporate governance model, its comparatively high ownership concentration, and its high state ownership. The goal of the underlying research was to give additional empirical evidence to the controversial topic of ownership concentration from a relatively unexplored case country Finland. Additionally, the hope was to find relations and rules that the findings follow to give a more streamlined explanation of the effect of ownership concentration on firm performance.
With a quantitative, longitudinal research approach, secondary data was gathered from all companies listed in the NASDAQ Helsinki. The timeframe for this research was the financial years from 2018 to 2021. Financial institutions and incomplete data sets were excluded from the analysis. EPS, ROA, and Tobin´s Q were used to describe firm performance. The percentage of monetary ownership and voting rights of the biggest and second-biggest owners (separately and combined), as well as the amount of all ten percent owners, were used as ownership concentration proxies. The data was analysed via SPSS statistical software. Descriptive statistics, pairwise correlation analysis, and OLS regression analysis are used.
The analysis found that the monetary ownership of the biggest owner has a negative impact on EPS and ROA but a positive impact on Tobin´s Q. The findings were inverted for the percentage of voting rights. The second biggest owner generally did not have an effect on firm performance.
With a quantitative, longitudinal research approach, secondary data was gathered from all companies listed in the NASDAQ Helsinki. The timeframe for this research was the financial years from 2018 to 2021. Financial institutions and incomplete data sets were excluded from the analysis. EPS, ROA, and Tobin´s Q were used to describe firm performance. The percentage of monetary ownership and voting rights of the biggest and second-biggest owners (separately and combined), as well as the amount of all ten percent owners, were used as ownership concentration proxies. The data was analysed via SPSS statistical software. Descriptive statistics, pairwise correlation analysis, and OLS regression analysis are used.
The analysis found that the monetary ownership of the biggest owner has a negative impact on EPS and ROA but a positive impact on Tobin´s Q. The findings were inverted for the percentage of voting rights. The second biggest owner generally did not have an effect on firm performance.