Further Evidence on the Relationship between Ownership and Performance.

The objective of this paper is to extend prior research into the relationship between ownership and performance while controlling for the known market anomalies of firm size and earnings to price. The empirical results do support recent works indicating a positive relationship between the degree of insider ownership and performance. Using a piecewise regression model, both size and ownership are found to be significant. An additional finding of the paper supplements several recent works questioning the earlier works of S. Basu (1977 and 1983). Copyright 1992 by MIT Press.