Insider Ownership, Corporate Governance and Corporate Performance

Insider ownership reflects the governance problem arising due to variance in the cash flow and control rights such ownership entails. Insider ownership is normally defined as managerial ownership without distinguishing between manager-owner and owner-manager. We believe that without taking due care of this distinction any generalization of prior conclusions relating insider ownership with performance particularly in the Indian context will not be meaningful. This paper attempts to study this anomaly by examining the role of insider ownership on the performance of the firm in the Indian context within the framework of changing external environment