The Effects of Ownership Concentration and Origin on Listed Firms’ Value: Empirical Evidence from Romania

This paper aims at exploring the relationship between ownership concentration and firm value by using panel data for firms listed on the Bucharest Stock Exchange (BSE). Additionally, we investigate the influence of ownership origin on firm value. Results drawn from a longitudinal analysis of a sample of all BSE listed companies, except for financial firms, provide support for a nonlinear relationship between the percentage of shares held by the three largest shareholders, considered individually, and firm value. Also, the nonlinear relationship is confirmed for the sum of holdings of the two largest shareholders, while the sum of holdings of the three largest shareholders exhibit a positive influence on firm value. Finally, if we consider the ownership origin, the results provide support for a positive relationship between the residence of the largest shareholder and firm value, while the influence of the sum of foreign investors’ holdings on firm value is nonlinear.