The Impact of Ownership Structure on Firm Performance: Evidence from Pakistan

The connection between ownership structure and firm performance has attracted much attention, especially in emerging markets, yet yielded many inconsistent empirical results. This paper presents an analysis of the association between eight categories of ownership, HHI Index, GINI index and firm performance in Pakistan. Some researchers argue that ownership concentration can improve firm performance by making the owners more willing or able to monitor agents. In contrast, others argue that in the presence of efficient markets, market monitoring will discipline the managers. The author's results show that there is significant positive association with ownership structure and market based performance measure and economic profit. The ownership proportion of the institutional shareholding and foreign shareholding are also positively associated with firm performance. JEL Code: G32.